LONDON – Britain may no longer be part of the EU, but for one of its best-known retailers, the European adventure is only just beginning.
Selfridges, purchased late last year by Central Group and Signa Holding, isn’t getting a radical makeover anytime soon, but it’s about to benefit from an overall 1 billion euros in planned investment.
That money has been earmarked for Selfridges, and other high-end European department stores owned by Central and Signa, which for years have been snapping up properties in city centers and looking to set new standards in luxury lifestyle retail.
Selfridges is the partners’ latest acquisition, and their plan is to make key tweaks to the business, but not to the overall strategy, operations or personality of the store that’s become synonymous with British luxury, creativity, and green values.
“For us, this was a once in a lifetime opportunity. Selfridges set the standards for the luxury department store, and now I think we’ll 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 alongside Stefano Della Valle, Selfridges’ new CEO and head of Central and Signa’s luxury department store group in Europe, Berninghaus said the British group is different from past acquisitions in that it doesn’t need to be restructured.
“We don’t have to clean up or repair the past, and that’s so attractive and exciting for us because it means that from day one, we can work towards the future.”
The deal only closed a month ago, so plans are still in their early stages. As reported, Selfridges managing director, Anne Pitcher, who was instrumental in helping to sell the company on behalf of the Weston family, will remain 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 thought to have paid around 4 billion pounds for the group, although they have never confirmed the figure.
As part of the deal, they purchased Selfridges’ Oxford Street flagship and its stores in Manchester and Birmingham, England; de Bijenkorf in the Netherlands; Brown Thomas and Arnotts in Ireland, and their associated e-commerce platforms and the properties in London, Manchester and Ireland.
Central and Signa’s combined existing portfolio 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 Germany, and Globus in Switzerland. Central wholly owns Rinascente in Italy, and Illum in Denmark.
As reported, by 2030 the partners are targeting 9 billion euros in total sales from their overall retail portfolio. Over the past 10 years they’ve plugged 1 billion euros in the stores in their portfolio, and will invest a similar amount in the next few years.
Selfridges may be the biggest group in the joint portfolio, but the partners’ plan is to treat it like the rest of the properties in its portfolio, as the pride of the city. They are clearly passionate about retail and 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 in order to grow, we need to offer new reasons for people to visit us and new experiences in-store. Reinventing retail is our vision for the future, not only for Selfridges, but for all our stores,” said Della Valle.
Berninghaus and Della Valle said initial investments at Selfridges will focus initially on the food and beauty halls and the omnichannel offer. They plan to tap into 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 upgraded, and we have the best-in-class concepts to draw from, in our stores in Berlin and Switzerland. We’ll use that innovation to develop a new concept for the food hall in Oxford Street,” said Berninghaus.
The plan is to have a food market and restaurants, too. While Selfridges currently has a host of restaurants, they’re spread throughout the store. The food hall offers luxury, organic fare, but it’s not a destination, and it doesn’t draw the crowds compared with the newly revamped Harrods food hall, or the lower ground floor at Fortnum & Mason, with its wine-tasting area, fresh food displays and lavish hampers.
“Restaurants represent strong traffic for us,” said Della Valle. “You can come and have coffee with a friend or dinner with your family. You’re already in the store. Then it’s our job to convert you from a visitor to a customer.”
He said that at the Berlin KaDeWe, the food hall takes up a whole floor and houses 27 restaurants. Globus in Zurich has a similar offer, Della Valle added.
In addition to spiffing up the food and beauty halls, the plan is to upgrade the digital offer so that customers have a “seamless omnichannel experience, and find the same merchandise online, and in store,” said Della Valle.
Central and Signa’s goal is to be the omnichannel market leader in Europe. Berninghaus said the departments stores under their ownership currently turn over 800 million euros in online sales, “and growing that business is a key pillar of our investment strategy over the next few years.”
The new owners are also planning to refurbish the Old Selfridges Hotel, next to the store. The space hasn’t functioned as a hotel for years, although it’s been used for fashion shows (it’s currently the London Fashion Week hub), and a variety of events, including Alannah Weston’s leaving party earlier this year.
Galen Weston, who died in 2021, purchased Selfridges in 2003 for 598 million pounds, and Alannah Weston served until recently as chairman of the board. In the years that Westons ran Selfridges, they expanded and refurbished the store, amped up the glamour, embraced experiential shopping, and made pioneering sustainability commitments.
In August 2020, Selfridges launched its Project Earth program to track its environmental targets and its commitment to a net zero future.
Earlier this month, Selfridges accelerated its net-zero carbon-emissions goal, moving its deadline up to 2040 from 2050 as a promise to the Climate Pledge, a cross-sector group of companies committed to reaching net zero 10 years ahead of the Paris Agreement.
Berninghaus and Della Valle said they are 100 percent behind the store’s sustainability commitments and will continue to pursue them under the 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 always see their stores and properties as part of the fabric of a city.
Berninghaus said many potential plans are under discussion.
“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.
The partners are sanguine about the prospects of physical retail generally. Over the last 10 years Central and Signa have invested more than one billion euros in their department store properties, and that didn’t stop during COVID.
They were convinced that bricks-and-mortar retail would bounce back, and it has.
Della Valle said nearly all of the group’s stores in Europe have returned to the same level of traffic pre-COVID-19, and the quality of their buying has improved. He said that they are getting a better quality of customer, and the average ticket price is higher, too.
“People have returned to the stores, and they linger and shop more, even in countries where international tourists levels were high. And we’ve been working more with with domestic customers,” and other nationalities beyond Chinese and Russian tourists, he said.
They are also bullish about their prospects in the U.K., and London, despite the challenges in trade and tourism in the aftermath of Brexit.
Berninghaus said that as they were negotiating the purchase of Selfridges, they 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 following COVID-19, the war in Ukraine and soaring inflation.
“London has been one of the most attractive cities in the world for centuries, and it will remain so. Oxford Street is one of the most exciting locations in the world, and the tourists will come back,” said Berninghaus. “We are here for the long term, and we are super optimistic for this market in the long term.”