Signa Group, the co-owner of British luxury chain Selfridges, has filed for insolvency after it fell victim to what it said was “severe economic pressure”.
“Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring process could not be sufficiently secured, and so Signa Holding has now applied for reorganisation proceedings,” the Austrian firm confirmed in a filing to the Financial Times.
Signa acquired Selfridges through a joint venture with Thailand’s Central Group, in a four billion pound deal that came with around 1.7 billion pounds of debt.
The group’s stake in the department store giant was ultimately reduced earlier this month, however, when Central gained control after exercising “its right to convert a loan provided by one of its subsidiaries”.
Selfridges as a group also consists of retailers such as De Bijenkorf in the Netherlands and Ireland’s Brown Thomas and Arnotts.
In a statement to FT, Central said: “[We] remain steadfast in our commitment to safeguard and support our European luxury stores regardless of our partner’s financial circumstances.
“We are in robust financial health and benefit from access to a wide range of funding streams to support the development of this unique portfolio.”
Financial struggles run rampant
Financial trouble at Signa came to light towards the end of October, when a number of its subsidiaries, including Signa Sports United, filed for bankruptcy, with the group stating at the time that it was planning to pursue a “structured (separate) investor process” for the companies involved.
It was later reported that Signa’s founder and chairman, René Benko, had been ousted by shareholders, while rumours of financial turmoil continued circulating.
Amid news of the restructuring, concern had also been raised with regards to its ongoing sales process with UK-based Frasers Group, which is looking to takeover German sports retailer, SportScheck.
While the deal, currently expected to close by the first quarter of 2024, had been thrust into doubt alongside the details of Signa’s reports, SportScheck CEO Matthias Rucker had a more positive outlook.
In a statement to FashionUnited, Rucker said: “We have a sustainable and solid transformation plan that will remain in place. SportScheck has not filed for bankruptcy.”