It is one of the most iconic brands on the planet, with more than 25 stores worldwide including a flagship shop in London’s Oxford Street. Selfridges, where millions of customers flock each year to shop, is now up for sale in a move which could eventually lead to its Canadian billionaire owners receiving up to £4bn.
A number of parties have now already expressed an interest and advisers at Credit Suisse hope to complete a deal within the next six months. Experts say the potential £4bn asking price is linked to the value of the property the Selfridges’ brand can boast, its current balance sheet and the company’s positive pandemic performance.
The 113-year-old company has certainly reversed the pre-pandemic trend of underperforming or failing department stores, following a major investment in its offering. The new owner of Selfridges is likely to inherit a strongly-operating business.
At Harper James Solicitors, our team of experts regularly work with ambitious businesses and support them as they negotiate complex sales and exits. Commercial partner Sarah Gunton says businesses of all sizes approaching the exit stage in their lifecycle can all benefit by following a few key rules.
She says: ‘If you are preparing your business for sale, then you should bear two things in mind: a potential purchaser will want to know what it is buying; and will be looking for every opportunity to reduce the offer price. This will be the case whether you are the size of Selfridges or are selling your family business. As a result, you should make sure that your records are in order so that you are in a position to reveal a clear and structured picture of your business. Those records should also show that issues that are likely to be of concern to the purchaser have already been addressed: for example, there are procedures in place to ensure that your standard terms and conditions apply (rather than the terms and conditions of your supplier or customer). It is also vital you have robust limitations of liability in place and any intellectual property rights are properly protected.’
Photo of Selfridges by Elliott Brown/under Creative Commons.