Thailand's Central Group to buy majority stake in three German luxury stores
today Jun 9, 2015
Thailand's largest retail conglomerate Central Group is to buy a majority stake in three luxury department stores in Germany from property firm Signa Group for an undisclosed sum as part of its expansion in Europe.
Central, controlled by the Chirathivats, Thailand's third-richest family, has been present in Europe since 2011 when it bought the upmarket Italian department store chain La Rinascente SpA for 205 million euros ($233 million).
The latest deal, Central's third in Europe, will strengthen its drive to be one of the global leaders in luxury shopping malls, Chief Executive Tos Chirathivat said on Tuesday.
"Central Group will continue to acquire additional department stores with strong potential in important European cities," Tos said in a statement.
Central will own 50.1 percent of The KaDeWe Group through wholly-owned La Rinascente, while Signa will keep the rest.
Signa Retail director Stephan Fanderl said it and La Rinascente would benefit from joint procurement, cross-border marketing and cross-selling opportunities.
Signa, run by Austrian property investor Rene Benko, has also been embroiled in a battle to take over Germany's Kaufhof department store chain.
KaDeWe, which owns stores in Berlin, Munich and Hamburg, was split off from Karstadt two years ago, after businessman Nicolas Berggruen rescued Karstadt from insolvency but then struggled to turn it around.
Berggruen split up the Karstadt group and sold it off in parts, with Benko buying first a stake in KaDeWe and then later Karstadt's regular department stores.
In Italy, the Thai group has repositioned the flagship La Rinascente store in Milan and 10 other stores, and plans to open a branch in Rome in February 2017, the company said.
In 2013, it also acquired Illum, Denmark's oldest department store, and started a five-year repositioning programme, expected to start in the third quarter this year and be complete in 2018.
La Rinascente and Illum have combined annual sales of about 600 million euros, expected to double through the acquisition of the three German stores, Central said.
Back home, Central has a sales target of 287 billion baht ($8.5 billion) for 2015. It plans to invest 37 billion baht this year to expand at home and overseas.
Central was founded in 1927 by Tiang Chirathivat, who arrived in what was then Siam from Hainan in China.
The leader in Thai retail, the family business has interests in Thai shopping mall developer Central Pattana Pcl and Central Hotel Plaza Pcl among others.
© Thomson Reuters 2019 All rights reserved.