LONDON – Britain may no longer be part of the EU, but for one of its best-known retailers, the European adventure is just beginning.
selfridgesAcquired late last year by Central Group and Signa Holding, it won’t be getting a radical makeover anytime soon, but is about to benefit from a total planned investment of €1bn.
That money has been earmarked for selfridgesand other high-end European department stores owned by Center and signwho for years has been buying up city center properties and looking to set new standards in luxury lifestyle retail.
Selfridges is the partners’ latest acquisition, and their plan is to make key adjustments to the business, but not to the overall strategy, operations or personality of the store that has become synonymous with British luxury, creativity and green values.
“For us, this was a once-in-a-lifetime opportunity. Selfridges set the standards for luxury department stores, and now I believe we will set the standards for the future,” said Dieter Berninghaus, Co-Chairman of Selfridges Group and Chairman of the Executive Board of Signa.
In an interview Thursday with Stefano DellaValleSelfridges’ new chief executive and head of Central and Signa’s luxury department store group in Europe, Berninghaus said the British group differs from previous acquisitions in that it does not need to be restructured.
“We don’t have to clean up or repair the past, and that’s very attractive and exciting for us because it means that from day one we can work towards the future.”
The deal closed just a month ago, so plans are still in their early stages. As reported, Selfridges managing director Anne Pitcher, who was instrumental in helping sell the company on behalf of the Weston family, will stay on until the end of the year.
There are no plans to change management, the executives said.
Central and Signa have a 50/50 partnership and are believed to have paid around £4bn for the group, although they never confirmed the figure.
As part of the deal, they bought Oxford Street flagship from Selfridges and its stores in Manchester and Birmingham, England; from Bijenkorf in Holland; Brown Thomas and Arnotts in Ireland, and their associated e-commerce platforms and properties in London, Manchester and Ireland.
The combined existing portfolio of Central and Signa includes 22 luxury department stores and two new stores under construction in Dusseldorf and Vienna. They are the owners of KaDeWe, Oberpollinger and Alsterhaus in Germanyand Globus in Switzerland. Central wholly owns Rinascente in Italy and Illum in Denmark.
As reported, by 2030, the partners are targeting €9 billion in total sales from their general retail portfolio. In the last 10 years they have injected 1,000 million euros into the stores in their portfolio, and they will invest a similar amount in the coming years.
Selfridges may be the largest group in the joint portfolio, but the partners’ plan is to treat it like the rest of the properties in their portfolio, like the pride of the city. They are clearly passionate about retail and are proud of their European properties and ability to push the boundaries of luxury lifestyle retail.
“We have iconic destinations in every city where we operate, and to grow we need to offer new reasons for people to visit us and new in-store experiences. Reinventing retail is our vision for the future, not just for Selfridges, but for all of our stores,” said Della Valle.
Berninghaus and Della Valle said initial investments in Selfridges will initially focus on food and beauty salons and omnichannel offerings. They plan to draw on the experience and performance of their other stores to inform what they do at Selfridges.
“The food hall here in the Oxford Street flagship needs to be updated, and we have best-in-class concepts to take advantage of, in our stores in Berlin and Switzerland. We will use that innovation to develop a new concept for the food hall on Oxford Street,” said Berninghaus.
The plan is to have a food market and restaurants as well. While Selfridges currently has a large number of restaurants, they are spread throughout the store. The food hall offers upmarket organic food, but it’s not a destination, and it doesn’t draw the crowds compared to the newly renovated food hall at Harrods, or the ground floor at Fortnum & Masonwith its wine tasting area, displays of fresh produce and sumptuous baskets.
“Restaurants represent a lot of traffic for us,” Della Valle said. “You can come for coffee with a friend or have dinner with your family. You are already in the store. So it’s our job to convert you from a visitor to a customer.”
He said that at Berlin’s KaDeWe, the food hall occupies an entire floor and houses 27 restaurants. Globus in Zurich has a similar offer, Della Valle added.
In addition to upgrading food and beauty salons, the plan is to update the digital offering so customers have a “seamless omnichannel experience and find the same merchandise online and in-store,” Della Valle said.
Central and Signa’s goal is to be the omnichannel market leader in Europe. Berninghaus said the department stores he owns now do more than €800 million in online sales, “and growing that business is a key pillar of our investment strategy in the coming years.”
The new owners also plan to renovate the Old Selfridges Hotel, next door to the store. The space has not been used as a hotel for years, although it has been used for fashion shows (it is currently the London center of Fashion Week), and a variety of events, including Alannah Weston’s wrap party earlier this year.
Galen Weston, who died in 2021, bought Selfridges in 2003 for £598m, with Alannah Weston serving until recently as chairman of the board. In the years that Westons ran Selfridges, they’ve expanded and renovated the store, expanded the glamour, embraced experiential shopping and made pioneering commitments to sustainability.
In August 2020, Selfridges launched its Project Earth program to track its environmental goals and commitment to a future net zero.
Earlier this month, Selfridges accelerated its goal of net-zero carbon emissions, bringing its deadline forward from 2050 to 2040 as a pledge to the Climate Pledge, a cross-industry group of companies committed to reaching net-zero emissions 10 years ahead of the Accord. Paris. .
Berninghaus and Della Valle said they stand 100 percent behind the store’s sustainability commitments and will continue to pursue them under new leadership.
The two partners are also in the early days of exploring options for the Old Selfridges hotel space, which they say should enhance the surrounding neighborhood on Oxford Street and serve the community for the next 20 to 30 years. Central and Signa are long-term thinkers, and they always see their shops and properties as part of the fabric of a city.
Berninghaus said many potential plans are being discussed.
“We don’t think in terms of a single hotel concept or a single restaurant concept, but rather a combined concept that brings tourists and locals together. We think in terms of a destination that makes the whole neighborhood more attractive,” he said.
Partners are optimistic about the outlook for physical retail in general. Over the last 10 years, Central and Signa have invested over €1 billion in their department store properties, and that didn’t stop during COVID.
They were convinced that traditional retail would recover, and it has.
Della Valle said almost all of the group’s stores in Europe have returned to the same pre-COVID-19 level of traffic, and the quality of their purchases has improved. He said they are getting a better quality of customers and the average ticket price is also higher.
“People have returned to the shops, and are staying and buying more, even in countries where international tourist levels were high. And we have been working more with domestic customers” and other nationalities in addition to Chinese and Russian tourists, he said.
They are also optimistic about their prospects in the UK and London, despite challenges in trade and tourism post-Brexit.
Berninghaus said that while negotiating the purchase of Selfridges, they had obviously considered the challenges that Brexit has created for trade with Europe. They also took into account the difficult economic situation that countries are facing after COVID-19, the war in Ukraine and skyrocketing inflation.
“London has been one of the most attractive cities in the world for centuries, and it will continue to be. Oxford Street is one of the most exciting places in the world and tourists will come back,” said Berninghaus. “We’re here for the long haul and we’re super bullish on this market for the long haul.”