The top floor of the central embassy in Bangkok looks more like a lounge for employees of a tech company than a mall. Visitors can browse for books, order Japanese food, work on laptops, or stretch out on sofas and gaze at the horizon.
The Thai company that owns it, Central Group, is in negotiations to buy venerable Selfridges stores in the UK from the Canadian arm of the Weston family in a Â£ 4bn deal to be reached before the end. of the year, according to people familiar with the transaction. .
In a time of a pandemic that has accelerated the migration to online shopping, Central was the first to draw people to department stores, so Bangkok’s mall may hold clues about Selfridges’ future. Central declined to comment on the sale talks.
Choosing a leading global brand would be a prize for Central, Thailand’s largest department store operator, controlled by the billionaire Chirathivat family. The group operates one of Bangkok’s chicest food halls and, in an acquisition drive over the past decade, has purchased and remodeled a number of European luxury department stores, including German KaDeWe, the Italian Rinascente, the Swiss Globus and the Danish Illum.
Although little known outside of Thailand or luxury retail, Central is one of the country’s largest conglomerates – groups often founded and owned by families of Chinese descent who played a role in the international companies since the beginnings of hardscrabble in the âshophousesâ of Bangkok. Other retailers are now waiting to see what the group, already one of Europe’s largest luxury retailers, could bring to Selfridges.
âCentral Group are seasoned retailers, and they will be a perfect fit and high quality owners following the Weston family,â said Ewan Venters, former managing director of UK luxury food emporium Fortnum & Mason. âYou can never buy short and expect to create value; it’s about creating destinations, and they have a track record of that.
Last year, Central competed with rival Thai-Chinese conglomerates Charoen Pokphand and TCC to buy Tesco’s Thai and Malaysian supermarkets, ultimately losing to CP’s $ 10.6 billion offer.
One of Selfridges’ main attractions, according to people familiar with the business idea, is the property; the brand owns full ownership of several of its stores, including its Oxford Street flagship.
Central has a history of bank lands in prime locations. He built the central embassy on land he bought from Britain in what was once the front gardens of the UK embassy. In 2017, after Britain decided to move the embassy to a skyscraper, Central joined Hongkong Land to purchase the rest of the complex, which included an elegant villa and a statue of Queen Victoria, for $ 420 million. in pounds sterling, the largest land deal ever in Thailand. . Central has yet to make an announcement on its plans for this land.
The group was founded by Zheng Ni Tiang, grandfather of its chairman and current general manager Tos Chirathivat, who arrived in Thailand from the Chinese island of Hainan in 1927. Tiang first helped with the rice business from his father-in-law before settling in Thonburi, across the Chao Phraya River from central Bangkok. The company was established in 1947 and started importing from 1950 under the name Central Trading.
At the time, only a few Thai department stores imported goods, mostly from elsewhere in Asia. Tiang and his son Samrit were the first to import American products, including ties, cosmetics, and English magazines and books. In a city where bargaining was the norm, Central pioneered fixed prices. The group expanded from Charoen Krung Road in what was then downtown Bangkok, building new department stores in the capital and beyond.
After Tiang’s intestate death, the family set up a family decision-making council which remains in place today. Ownership and management of Central is more widely shared within the family than most other Thai conglomerates.
The group’s executive committee, or âfamily councilâ, made up of seven members, is headed by Tos and made up entirely of Chirathivats. The 11-member Central management team has four family members, but also includes Vittorio Radice. The Italian businessman joined the Thai company when Central bought La Rinascente in 2011. After overseeing a Selfridges overhaul in the 1990s, he is expected to lead a further overhaul if the deal goes through.
Thailand’s politics have been notoriously volatile and its economic performance poor over the past decade, which analysts say has accelerated the company’s overseas expansion. Its largest mall, CentralWorld, was burnt down during the Bangkok unrest in 2010.
Central tried in vain to penetrate the Chinese market, then refocused on Vietnam, where it is now the leading foreign distributor, and on Europe. In 2017, she formed an e-commerce partnership with Chinese online giant JD.com.
Covid-19 and a hard lockdown this year hammered the Thai economy and pushed the group’s recently introduced Central Retail unit into a third quarter loss of 2.22 billion Bt ($ 67 million). As the pandemic accelerated e-commerce, Central sought to attract shoppers to malls by providing more options for eating and drinking, expanding seating, and offering what an analyst called “retail. experiential “.
âCustomer experience is becoming one of the key elements in retail store design,â said Jariya Thumtrongkitkul, head of retail, advisory and transaction services at CBRE real estate group. âIt’s a quality that online shopping and e-commerce cannot compete with. “
If the sale goes through, analysts say, Selfridges would become Central’s best-known foreign franchise and one of the most high-profile foreign acquisitions by a Thai company to date.
âWhether you go to Rinascente in Milan, KaDeWe in Berlin or Illum in Copenhagen, these are cool, well presented stores with good brands in an attractive environment,â said Peter Williams, former CEO of Selfridges who chairs several companies in retail. “I think they did a good job, and I can very well understand why they are interested in Selfridges.”
A decade of expansion in the fanciest stores in Europe
Central Group acquires Italian department store chain Rinascente
Buy the Copenhagen store Illum
Central acquires the German Kaufhaus des Westens (KaDeWe) from the Austrian group Signa
Central and Signa acquire Swiss Globus
Central and Canadian branch of Weston family begin talks on sale of Selfridges
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