February 22, 2024

Globus wants to separate itself from Signa’s bankruptcy, and its department store operations must continue

After the bankruptcy of René Benko’s Signa Holding, other parts of the group are trying to protect themselves. Customers of the Globus chain of stores should not notice any of the disruptions.

Will the Thai Central Group acquire the half of Globus previously owned by Signa?

Dennis Balibus – Reuters

What had been expected for days arrived on Wednesday: Rene Benco’s Signa Holding company was insolvent. As the company announced, the managing directors in Vienna are filing for bankruptcy. It is scheduled to be renewed with self-administration. It remains to be seen whether this is possible or whether there will be bankruptcy and liquidation of Signa Holding.

Swiss Signa subsidiary is applying for debt moratorium

The fact of Signa’s insolvency is also arousing interest in Switzerland, and not only because of private bank Julius Baer, ​​with which the group has a total of 606 million francs of outstanding loans.

Benko has been co-owner of department store chain Globus since 2020. The department stores are half owned by Signa and half by Thai Central Group. Together the two formed the European luxury department store group, which also includes KaDeWe Group in Germany and Selfridges in Great Britain and Ireland.

It can be assumed that Globus will try to protect itself from the bankruptcy of Signa Holding. Its sister company, Signa Retail Selection AG, based in Switzerland, has already decided to do so, as was announced on Wednesday evening. The Board of Directors and management decided to submit a request to the responsible court to issue a suspension decision. This allows the company to avoid bankruptcy and instead take restructuring measures and obtain partial debt relief.

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According to Christian Wenger, Chairman of the Board of Directors of Signa Retail Selection AG, the aim of this measure is to separate the company from the Austrian parent company and liquidate it in an orderly manner: “This step enables the Board of Directors and management, in cooperation with the administrator, to manage the business on their own responsibility and independently to address cases The insolvency of the rest of the Signa Group in an orderly and transparent manner.

Signa Retail Selection AG is responsible for the business of the Galeria department store chain in Germany. Therefore, the board of directors is likely to plan to sell Galleria.

Finding a buyer shouldn’t be a problem in luxury stores

According to insiders, a similar path could also be followed with luxury stores: requesting debt deferrals in order to distance themselves from Cigna and the turmoil there. The activities of Globus and Signa’s other luxury department stores are consolidated into another Swiss company, European Investment Holding AG.

In the opinion of the people concerned, deferring debt repayment will not be a problem for this company. On the one hand, there is little debt in department store operations that can be easily serviced.

On the other hand – unlike the German Galleria chain – finding a buyer should not be a problem. Globus and Co own only half of Signa, the other half owned by Thai Central Group. The Thais officially announced a few weeks ago that they are behind the luxury department store business in Europe and will step in if necessary – alone or with a partner. This applies to Globus as well as to the homes of the KaDeWe group or Selfridges.

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Globus continues to operate normally

Concerns about the future of Globus are unfounded, as the people concerned unanimously assert. In addition, none of these operations will be noticeable in daily business. Department stores continued to operate as usual.

It was emphasized that nothing would change in the renovation and investment plans. The new building in Basel is fully financed, construction is progressing as planned and is still scheduled to open in the fall of 2025. Everything at the Bellevue Hotel in Zurich will remain the same: as soon as the property owner PSP Swiss Property completes the renovation of the building, it will return there , with catering concepts on the ground floor and a delicatessen department in the basement. It is scheduled to reopen in fall 2024.

The hope lies with the Thai Central Group

Globus’s ability to continue to operate normally will depend largely on the ownership issue being clarified. The hopes are pinned on Thai Central Group and its owners, the Chirativat family.

According to experts, there is no doubt that the Thais will be suitable owners. The Chirativats are retail professionals and have been for generations. In their home country Thailand they are the largest mall operators. They now also have over a decade of experience in the European business with luxury stores. It began its involvement in Europe in 2011 with the purchase of thriving Italian department store group Rinascente, which is now back on track. In 2015, Benko’s Signa Group collaborated and the joint venture European Luxury Department Store Group was established.

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In this joint venture, the Thais were responsible for the department store business from the beginning, while Signa looked after the properties. Perhaps a complete takeover of the operating business will not be a problem for the Thais.