Selfridges’ owners have launched a formal auction to sell the department store chain, which has been valued as high as £4 billion ($5.5 billion U.S.), according to Yahoo! News. The potential sale emphasizes the difficult position many department stores find themselves in: Selfridges has taken multiple steps to revive its business, but despite some notable successes it is still facing significant headwinds.
Credit Suisse will look for a buyer in a process that could be completed by the end of 2021. A “small number” of parties, including sovereign wealth funds of Abu Dhabi, Saudi Arabia and Qatar and Hong Kong’s Lane Crawford, have already been named as potential bidders. The auction follows reports that an unnamed bidder approached the Weston family, who own Selfridges, with an offer in June 2021.
The Qatari fund’s bid is particularly notable given that Selfridges is popular with Middle Eastern shoppers, and the sovereign wealth fund already owns rival chain Harrod’s. A successful deal could see two of the UK’s most historic department stores coming together under a single owner.
Selfridges has mostly avoided the steady decline faced by other UK department stores through heavy investment in its brick-and-mortar locations. The retailer’s most recent move was commissioning artist Osman Yousefzada to reimagine the façade of its Birmingham store, changing the bulbous building’s look from rows of silver plates to a black and pink patterned design using the world’s largest canvas.
Efforts to modernize its look and invite new brands have been mostly successful, but Selfridges is battling two tough enemies: lower foot traffic at its London Oxford Street and COVID-imposed shutdowns. The company was forced to cut 450 jobs, accounting for 14% of its workforce, following what the company called the “toughest year” in its history.
Still, Selfridges’ fate is looking rosier than some of its rivals. Debenhams shuttered its brick-and-mortar presence entirely after being acquired by digital fashion retailer Boohoo Group for £55million ($75 million U.S.) in January 2021. The retailer already had entered liquidation in December 2020, and its new owner wanted the department store to “emerge in a different shape beyond the pandemic.”
Former parts of Selfridges are already living on online. The Miss Selfridges brand, launched in 1966 as a youth brand and acquired by Arcadia Group in 1999, was acquired by online fashion retailer ASOS in February 2021. Nordstrom took its own minority stake in the brand, as well as several others in the Topshop portfolio, in July 2021.