Brown Thomas and Arnotts may sell in £4bn Selfridges deal – report

Premier department stores Brown Thomas and Arnotts could be sold following a surprise €4.7 billlion bid for their parent, Selfridges Group.

A potential buyer has offered £4 billion (€4.66 billion) for the Weston-family controlled Selfridges, which owns high-profile Dublin department stores Brown Thomas and Arnotts.

Selfridges would not comment on Thursday, but it is understood the bid is for the entire business, including the Irish properties.

Sources familiar with the business said that the unsolicited offer had taken the group by surprise, but added that it was taking it very seriously.

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Selfridges has appointed investment bank Credit Suisse to advise on the offer, which was first reported by real estate bulletin, React News.

The upmarket retail chain frequently receives unsolicited offers and looks closely at all of them, sources say.

They cautioned that the latest approach may not necessarily result in a deal.

Established by Harry Gordon Selfridge in 1908, the late Galen Weston bought the group for £598 million in 2003.

Irish connections

It now comprises a stable of high-end stores in Britain, Ireland and the Netherlands, led by the flagship on London's Oxford Street.

The Westons have has strong Irish connections through interests tying them to both Brown Thomas and the hugely successful budget fashion chain, Penneys, known as Primark outside the Republic.

Mass-market department store chains are enduring difficult times as shoppers move increasingly online.

UK-owned Debenhams went bust last year, resulting in 2,000 job losses and store closures in the Republic.

But upmarket trophy assets such as Selfridges can still command high prices and attract overseas buyers.

In 2019, Liberty in London was sold to a consortium of private equity investors for more than £300 million, or more than twice its annual revenues.

Selfridges' West End rival Harrods was acquired by the Qatar Investment Authority for £1.5 billion in 2010.

In results covering the 12 months to February 2020, Brown Thomas Arnotts reported a 5 per cent rise in sales to €173.7 million with pretax profit falling 10 per cent to €5.94 million.

Wittington Investments Ltd, the family holding group that owns Selfridges, is separate from the UK entity of the almost-identical name that owns Associated British Foods, the parent of Irish-founded Penneys/Primark store group.

Internal change

The approach comes at a time of considerable internal change; the family patriarch, Galen Weston, died earlier this year. Paul Kelly, who had run the Selfridges group since the Westons acquired it, moved to another role in the holding company in 2019.

Wittington Investments Ltd is run by Mr Weston's son, also called Galen, while his sister Alannah Weston is chairwoman of Selfridges group. Both are cousins of ABF chief executive George Weston.

"I am quite surprised they are entertaining a sale," said one executive who is familiar with the company and the family. "But they are heavily dependent on overseas tourism, especially from China and the Middle East, and they may be looking at the numbers and thinking how long is the way out of the pandemic."

The executive added that a sale to a sovereign wealth fund or tycoon was more likely than a deal involving private equity. – Copyright The Financial Times Limited 2021