What: In his first interview since acquiring Selfridges, Central Group's CEO admits paying a premium price of GBP 4 billion for the British department store, while expressing confidence in its long-term value despite current market challenges.

Why it is important: The acknowledgment reflects broader industry challenges in valuing traditional retail assets, particularly as department stores navigate post-pandemic recovery and changing consumer behaviors.

Central Group's CEO Tos Chirathivat has acknowledged that the GBP 4 billion price tag for Selfridges was "high, especially in this environment," though he suggests it may prove reasonable in a decade. The admission comes as Selfridges faces financial headwinds, with pre-tax losses doubling to GBP 340 million despite revenue growth to GBP 1.6 billion for the year ending February 2024.

The department store's ownership structure has recently stabilized following Central's partnership with Saudi Arabia's Public Investment Fund, which acquired a 40% stake after previous co-owner Signa's financial troubles. Under newly appointed CEO André Maeder, Selfridges is focused on "rebuilding the store" and improving operations, with Chirathivat maintaining that things are now "on track" and expressing ambitions for Selfridges to become "the best store in the world."

IADS Notes: Following Signa's collapse, Central has partnered with Saudi Arabia's PIF, which acquired a 40% stake in October 2024. Under new CEO André Maeder, Selfridges faces the challenge of justifying its valuation while dealing with doubled pre-tax losses and implementing a transformation strategy.

Selfridges owner admits GBP 4 billion price tag was ‘high’