Department stores Saudi fund acquires Signa stake in British department store chain

The sale of the department store empire of the failed Signa Group continues to make progress. A Saudi sovereign wealth fund has now acquired a stake in the British luxury department store chain Selfridges. Bank Julius Baer can now hope to recover a sum in the millions.

With the acquisition of Signa's stake in the Selfridges Group, the Saudi Public Investment Fund (PIF) will hold a 40 percent stake, the Central Group announced on Tuesday night. The Thai group will hold a 60 percent majority stake in Selfridges as part of a partnership. The ownership structure applies to both the operating companies and the department store group's real estate companies.

Solution for another department store

The Central Group can thus announce a solution for another luxury department store chain in which it was involved with the collapsed Signa Group of Austrian investor René Benko. At the end of September, the Thai group announced the purchase of Signa's stake in Globus' operating business, making it the sole owner of the Swiss department store chain.

In June 2024, the Thai group had already taken over the entire business operations of the German department stores KaDeWe, Oberpollinger and Alsterhaus.

Bär could hope for 100 million

The Saudis' investment in Selfridges should also be good news for those responsible at Bank Julius Baer. The bank had granted the Signa Group loans totaling 606 million Swiss francs, which were secured by collateral "in connection with commercial real estate and luxury retail".

Julius Baer had never officially confirmed the identity of Signa as the borrower. However, the bank had already announced in November 2023 that the exposure at risk comprised three loans to various entities of a "European conglomerate". According to an article in the "Neue Zürcher Zeitung" (NZZ) on Tuesday, a third of the total Signa loans, i.e. around 200 million Swiss francs, are likely to have gone to "Signa European Invest Holding", which holds the stakes in Globus, KaDeWe and Selfridges.

According to the NZZ article, insiders assume that the Zurich-based private bank could receive just under CHF 100 million back from this. As Julius Baer had already written off the entire Signa loans in the 2023 financial statements, the amount would be recognized as an extraordinary gain. A Baer spokeswoman declined to comment on the report on request.

Probate proceedings take time

However, the transactions are not yet formally concluded with the signing, as the NZZ emphasizes. This is because the purchases of the shares in Globus and Selfridges are realizations as part of restructuring proceedings.

The administrators would now have to propose a debt restructuring agreement to the creditors, which would probably also include a write-off of some of the claims. However, according to the newspaper, it is likely to be months before such an agreement is reached.