Who Is Selfridges’ New Thai Owner?

Selfridges has been acquired by a consortium led by Central Group, Thailand’s largest retailer, ending months of speculation with a deal that clinched days before Christmas.

The deal brings together Central Group and Austrian real estate investment firm Signa Holding, who will own the chain in a 50-50 partnership. The financial terms of the deal were not disclosed, but it was previously reported that the dynasty behind the department store, the Weston family, had received a £4 billion ($5.66 billion) offer for its UK properties.

Central Group owns an extensive network of upmarket malls and shopping centres in Thailand, Vietnam, Malaysia and in India and has been expanding in Europe for the last decade. It purchased nine La Rinascente department stores in Italy in 2011, followed by the landmark Illum department store in Denmark in 2015.

Its acquisition of Selfridges extends a long-standing series of partnerships with Signa. The two companies teamed up to run Germany’s KaDeWe Group, with Central Group acquiring a majority stake in the Berlin department store in 2015. And they acquired Switzerland’s Globus chain of department stores in a deal valued at over 1 billion Swiss francs ($1.03 billion) in 2020.

The annual turnover for their combined department stores portfolio was €5 billion ($5.66 billion at current exchange rates) in 2019 and is projected to grow to more than €7 billion by 2024.

The pair’s deal for Selfridges is by far their biggest deal to date.

The takeover also marks a new chapter for Selfridges, whose London flagship was founded in 1908. The Selfridges Group’s portfolio now comprises 18 leading department stores, including Selfridges in London, Manchester and Birmingham, de Bijenkorf in Netherlands, Brown Thomas and Arnotts in Ireland, their associated e-commerce platforms and the properties in London, Manchester and five locations in Ireland.

Since being acquired by the Weston family in 2003, Selfridges has secured a reputation for being one of retail’s most innovative players. Though it has been severely tested by the collapse in international tourism brought on by the pandemic, Selfridges remains a highly prized asset for a player like Central Group seeking a crown jewel for its European portfolio.

A Family Business

At the heart of Central Group’s story is the Chirathivat family. Though the clan currently ranks fourth in Forbes’ list of Thailand’s wealthiest with a net worth estimated at $11.6 billion, it started small, when Tiang Chirathivat arrived from the Chinese province of Hainan to a nation then called Siam, and decided to set up a shop in Bangkok in 1927, calling it Keng Seng Lee.

In 1957, Tiang’s son Samrit expanded on his father’s legacy by opening Thailand’s first department store, in Bangkok’s Wang Burapha neighbourhood.

Today, the business is overseen by the youngest of Samrit’s eight children, Tos Chirathivat, the group’s chief executive and the driving force behind its continued international expansion since taking the reins in 2013. Older brother Prin Chirathivat is the group’s deputy CEO and sister Yuwadee Chirathivat is executive director of the publicly-listed Central Retail Corporation arm of the company.

In all, according to Dr Natenapha Wailerdsak of Thammasat University’s business school in Bangkok, dozens of family members are now involved in the business, including members of the fourth generation.

The interests of more than 150 members of the family are overseen by a 12-seat family council that advocates for the needs of family members, but is not involved in the running of Central Group.

Though Thailand boasts other major retail and real estate developers, including Siam Piwat and The Mall Group, Wailerdsak says there is little dispute about Central Group’s position.

“In Thailand, it’s the biggest,” she said.

Indeed, with four million square metres of net leasable area, 60 malls, 2,400 retail stores, 1,000 food outlets and 48 hotels, it’s easy to see the imprint Central Group has made on the business landscape of its homeland.

In recent years, it has also looked to update its business model, getting into online commerce via a $500 million joint venture signed with China’s JD.com in 2017. Central Group has also been a major backer of Southeast Asian delivery unicorn, Grab, and has its own fintech division.

In February 2020, Central Group listed a subsidiary overseeing its retail holdings in Thailand, Vietnam and Italy on the Thai stock exchange. Central Retail Corporation raised more than 78 billion Thai baht ($2.5 billion) in Thailand’s largest ever IPO. It’s current market capitalisation sits just above 199 billion Thai baht ($5.8 billion).

According to Wailerdsak, this was the first time the group’s retail arm has moved beyond being a family-managed business (its hotel group has been listed for decades). She said the move could signal a new era in which the family may step back from being so actively involved in managing almost every element of the group.

Another indication of this move was the appointment of Yol Phokasub, the former head of Siam Commercial Bank, as Central Retail Corporation’s chief executive. According to Wailerdsak, it is Phokasub, rather than any executive from within the family, that has increasingly become the public face for Central since the IPO in Thailand.

“I think this means they are thinking about how to move from being a family business to a professional corporation in the future,” she said, adding that the future of the larger Central Group rests largely on its next CEO.

“Tos Chirathivat is very respected. He is very well known and he knows the Thai retail business very well. Central Group is expanding internationally because of him and its future will depend a lot on who will succeed him, though we don’t know who that will be,” Wailerdsak said.

Whatever the future may hold, the new owner of Selfridges will be focussed for now on proving itself a capable caretaker of a legacy British department store.

“It is a privilege to be acquiring Selfridges Group, including the flagship Oxford Street store, which has been at the centre of London’s most famous shopping street for over 100 years. As family businesses, Central and Signa will focus on delivering exceptional and inclusive store and digital experiences for both local residents and overseas visitors alike, to ensure we can give all the stores in Selfridges Group a bright future for the next 100 years,” Tos Chirathivat said in a statement.

As the Central Group CEO alludes in his post-acquisition comments, a large part of that mission in the short term, will involve gearing up for the return of international tourism, especially long-haul Asian tourism halted by the pandemic, that will provide a boost to all of its European businesses in years to come.