LONDON – The restructuring is rolling ahead at Signa Holding, the Austrian commercial property giant which co-owns Selfridges with Central Group.
The company was placed into administration earlier this month, and is being managed by German specialists Arndt Geiwitz following the resignation of Signa founder and chairman René Benko.
On Wednesday, management said in a statement that Signa has filed an application with the Commercial Court of Vienna for Signa Holding to enter “reorganization proceedings under self-administration.”
The company also applied to the court for the adoption of its reorganization plan.
“The aim is to continue business operations within the framework of self-administration and the sustainable restructuring of the company,” Signa said.
Signa, which purchased Selfridges in a 50-50 deal with Central Group two years ago, now has a minority share in the U.K.-based department store group.
It ran into trouble earlier this year amid rising interest rates, falling property prices, and a slowdown in consumer consumption. Having failed to secure the appropriate liquidity to restructure, it was forced to call in the administrators, and deal directly with the courts.
Central Group immediately voiced its support for the department stores that it currently co-owns with Signa and, a few days later, took over majority ownership of Selfridges.
On Nov. 14, Central Group confirmed that it had exercised its right to convert a loan, provided by one of its subsidiaries to the Selfridges group, into equity. It is now Selfridges’ majority shareholder, and also controls of the joint venture company the oversees Selfridges Group.
Signa said it is aiming to reorganize the company’s responsibilities and liabilities “while maintaining the value” of its investments.
Together with the restructuring administrator, who still needs to be appointed, management said it will implement further measures to ensure the continuation of business operations.
Separately, German media reported last Friday that Signa Real Estate Management, which is based in Germany, filed an application for bankruptcy at the Charlottenburg District Court.
There were also media reports that Signa was preparing insolvency applications for several parts of the company based in Germany, although this could not be confirmed.
The group comprises the Selfridges stores in the U.K., Brown Thomas and Arnotts in Ireland, and De Bijenkorf in the Netherlands.
When it took majority control of Selfridges Group, Central said the move “solidified” its position as an owner-operator of the largest European luxury department store group, “offering customers the best curation of brands, merchandise and extraordinary experiences.” – with contributions from Cathrin Schaer, Berlin