Brown Thomas safe from insolvency move
Brown Thomas store decorated for Christmas Pic: Larry Cummins
European property giant, Signa, which in 2021 entered a consortium with Thai company, Central Group to buy Brown Thomas Arnott's through its parent company, Selfridges Group, has filed for insolvency after failing to secure emergency funding.
The Austrian group, founded in 1999 by business mogul, Rene Benko filed for insolvency on Wednesday in Vienna, with the aim of managing its restructuring as a debtor-in-possession, according to an emailed statement from the company.
Shielding Brown Thomas and Arnotts stores from the fallout, Thailand's Central Group, owned by one of Asia's wealthiest families, the Chirathivats assumed a majority shareholder position in Selfridges, Brown Thomas and Arnotts last week as financial challenges within Signa deepened.
"The news today on Signa Holding does not change anything for Brown Thomas Arnotts as we trade independently of any support from shareholders," a spokesperson for Brown Thomas Arnotts told the
"We welcomed the news earlier this month that Central Group is to become the majority shareholder in the Selfridges Group clearly demonstrating their unwavering support for the business. At Brown Thomas and Arnotts, its business as usual."
Brown Thomas Arnotts was bought for €4.7bn in late 2021 in a deal that saw their parent company, Selfridges Group, acquired by the Thai and Austrian consortium.
Speaking at the time, Central Group said the acquisition would “create one of the world’s leading omni-channel luxury department store groups,” with the sale including Brown Thomas stores in Dublin, Cork, Galway and Limerick as well as Arnotts in Dublin.
It is understood that a struggling Signa still holds a minority stakeholder position in the Irish luxury retailers, with the filing a bitter blow for the property giant's owner Benko, who reportedly boasted how only the British royal family and the Catholic church rivalled his array of exclusive properties.
With assets valued at €23bn at the end of 2022, the collapse may become the largest real estate meltdown in Europe since the global financial crisis.
“Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured,” the company said on Wednesday.
What set Benko apart from many other property investors is that the he continued to make high-profile acquisitions even as challenges to his debt-laden structure started to surface in recent years.
In frantic talks to secure financing to plug up to €600m of short-term liquidity needs, Signa reached out to a wide range of financiers, however, the level of complexity and the tight time frame for a deal were too much to overcome.
Additional reporting from Bloomberg.
