Cambridge Properties Holding Limited, the esteemed proprietor of the renowned Selfridges department store in London, is currently pursuing additional funding from its parent company, Central Group, in response to the insolvency of its co-owner, Signa. According to recent filings, discussions are underway with the Thai group to secure financing for upcoming debt payments. The insolvency of the co-owner, Signa Prime Selection AG, has created substantial uncertainty regarding the requisite financial backing for the group.
The financial obstacles confronting Selfridges serve as a symbol of the broader repercussions stemming from the collapse of the Signa empire. Signa, a conglomerate with diverse investments in prime retail projects in Germany, the Chrysler Building in the US, and various other holdings, has encountered multiple insolvency filings in recent weeks. The consequences of these developments may prompt business partners to intervene in order to sustain investments or assume control of them.
In 2022, Central Group, the co-owner of Selfridges alongside Signa, acquired the iconic department store with Rene Benko’s Signa. However, the interest payments on the property company’s significant £2.2 billion debt have escalated, necessitating support from the owners. Despite the financial predicament, a spokesperson for Selfridges has reassured that the department store operates independently from its shareholders and has expressed gratitude for the continued backing of Central Group.
In an endeavor to alleviate immediate financial pressures, Central Group provided a substantial shareholder loan note to cover interest payments in November. This loan may be converted to equity in May 2024. The company has also converted another shareholder loan on the operating side to equity, thereby acquiring a majority stake. However, the overall debt burden of Cambridge Properties Holding remains substantial, encompassing external bank loans, a mezzanine loan facility, and the uncertainty surrounding the ability of Signa Prime to honor guarantees associated with a loan from Bangkok Bank.
The recent financial reports of Cambridge Properties Holding disclosed a revaluation gain of £282 million, reflecting the increased value of the Selfridges property post-acquisition. This significant investment was part of a multi-billion-pound acquisition of Selfridges by Central Group and Signa from the Weston Family.
Selfridges, established in 1908 by Harry Gordon Selfridge, has served as a pillar of luxury retail in London with its flagship store on Oxford Street, along with additional locations in Manchester and Birmingham. The recent financial developments hold great significance for the esteemed department store and its standing within the retail landscape.
In summation, the financial predicament of Selfridges underscores the extensive implications of the insolvency of its co-owner, Signa. As discussions with Central Group progress, the iconic department store continues to occupy a central position within the luxury retail sector, and its enduring legacy is a testament to its continued appeal.
