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Future of Selfridges in question as co-owner hit by cash crunch

Selfridges is owned by the Canadian branch of the billionaire Weston family
Selfridges is owned by the Canadian branch of the billionaire Weston family

Investors are speculating over the future ownership of Selfridges as the department store chain’s co-proprietor Signa Group experiences a financial crisis.

Shareholders on Friday ousted the real estate giant’s chairman Rene Benko, who is fighting for control over his £20bn empire.

The Austrian company acquired Selfridges last year in a £4bn joint deal with Thai conglomerate Central Group which put roughly £1.7bn in debt on the two firms.

Signa plans to appoint German restructuring expert Arndt Geiwtiz to oversee a rescue of the company, investor Hans Peter told broadcaster ORF.

Analysts and industry sources have told the press that a likely result could be the sale of Signa’s 50 per cent stake in Selfridges to Central.

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The move would further delay plans originally announced by Signa to build a hotel on Oxford Street and redevelop Selfridges’ food hall.

Peel Hunt analyst John Peterson told The Telegraph that Middle Eastern or Chinese investors could submit bids for Signa’s trophy asset.

Rising borrowing costs and falling house prices have weighed on Signa’s growth this year, while Benko has suffered personal setbacks.

His offices in Austria were raided last October as part of a government corruption investigation. He denied wrongdoing and was not charged.

A Selfridges spokesperson told The Sunday Times: “This does not change anything for Selfridges. Selfridges trades independently of any support from its shareholders.

“We are delighted to have the ongoing and unwavering support of Central Group. We are very focused and excited by the Christmas period and welcoming our customers into our stores for an exceptional experience.”

City A.M. has contacted Selfridges for comment.