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Brown Thomas and Arnotts, Ireland’s premier department stores, are understood to be on the market as part of the Selfridges group in a deal which carries a £4 billion price tag.
The decision comes after the department store group received an approach from a potential buyer.
Established by Harry Gordon Selfridge in 1908, the retailer was acquired by the Weston family for £598 million in 2003 and now comprises a stable of upmarket stores in Britain, Ireland and the Netherlands led by the flagship on London’s Oxford Street.
Credit Suisse has been appointed adviser after an unsolicited approach, according to people briefed on the process, which is at an early stage and may not lead to a transaction.
It is believed that the Irish operations, which trade as Arnotts and Brown Thomas, form part of the approach, which was first reported by React News.
The business, owned by the Canadian branch of the Weston family, includes the freehold to more than 600,000 square feet of selling space at the main Beaux Arts store on Oxford Street.
Mass-market department store chains have endured a difficult time as more shopping has moved online. In the UK, Debenhams recently went bust and employee-owned John Lewis has closed several stores. But upmarket trophy assets such as Selfridges can still command high prices and attract overseas buyers.
In 2019, Liberty 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 its most recent results, to February 2020, Brown Thomas Arnotts reported a 5 per cent rise in sales to €173.7 million with pre tax 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.
The approach comes at a time of considerable internal change; the family patriarch, Galen Weston, died earlier this year while 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 Weston’s son, also called Galen, while his sister Alannah 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