Central Group takes over the entire Swiss department store chain

It took a while, but the future of Globus has now been clarified: The Chirathivat family’s Thai Central Group is taking over the entire operational business of the Swiss department store chain. Central confirmed this on Monday after the NZZ had already reported on it yesterday. The Chirathivats owned 50 percent of Globus, the rest was held by René Benko’s Signa Group. Since the Signa Group is now insolvent, this share was up for sale.

As the Central Group announced, it will take over the magazines from Globus AG. This is the company that runs the globe. This means that all nine Globus stores in Switzerland, i.e. the seven department stores in Geneva, Lausanne, Bern, Lucerne, Zurich, Glatt and St. Gallen as well as two stores currently under construction on Bellevue in Zurich and on the market square in Basel, will go into sole ownership Owned by Central Group.

Swiss André Maeder, CEO of Central’s European business, is quoted in the statement: “We are pleased to become the full owner of this leading luxury retail company. [. . . ] We will support the company in its further growth.” The future of Globus as a department store operator is therefore secured.

The future of the Globus properties is still uncertain

What remains unclear, however, is what will happen next with the Globus properties. The communiqué explicitly states that the ownership structure of the Globus Switzerland real estate company will remain unchanged. The Thais still only own 50 percent of Globus real estate. The rest lies in the insolvency estate of the real estate company Signa Prime.

This involves five properties: in Zurich the Globus department store near Bahnhofstrasse and a neighboring office building. In Bern around the Globus branch including an adjacent hotel. In Basel around Freie Strasse 50, where the temporary Globus is now located, as well as the building on the market square, which is currently being rebuilt and, according to previous Signa brochures, will be the most beautiful department store in Switzerland.

These properties are housed in separate companies. The Central Group is negotiating there with the insolvency administrator of Signa Prime. According to observers, the situation in real estate is very complex because René Benko had more of a hand in this area than in the retail trade.

It is likely that Central will take over the entire department store building in Zurich. In the fourth report prepared in July by the restructuring manager of Benko’s real estate company Signa Prime, it was said that the Thais had registered their interest in this property. It is not only the most valuable and strategically important of the five properties; Central, together with the Signa Group, has also invested a lot of money in the renovation over the past four years.

The Chirathivats, together with Signa Prime’s restructuring manager, could sell the other properties to third parties. In order to operate the department stores, Central does not have to own the properties. A long-term rental agreement is sufficient. Globus is already not the owner of the majority of locations, but rather a tenant.

There won’t be much money flowing in the takeover of Globus’s operating business – if any at all. The most valuable thing about the department store group is the real estate. That was already the case five years ago when Central and Signa Globus bought Migros. According to insiders, of the billion that was paid at the time, only a small to mid-single-digit million amount was attributable to operational business.

Migros sees its loan to Globus as secure

Migros also spoke up on Monday. The Migros Cooperative Association (MGB) welcomes the takeover of Signa’s share in Globus by the Thai Central Group.

The announcement seems strange at first glance, because Migros sold Globus four and a half years ago. However, there is still a loan of 125 million francs that the MGB made during the sale and which has not yet been repaid.

The reason was the corona pandemic, which broke out between the signing of the sales contracts and the actual sale, the closing. It could have jeopardized the transaction in the sense of force majeure. The loan guaranteed that Signa and Central would not suddenly have to spend the 300 million francs earmarked for renovations on the financial consequences of the pandemic-related closures. It was a concession from Migros; In return, the sales price agreed before the lockdowns remained untouched.

As Migros writes, the change of ownership does not change the credit, which was not granted to the two buyers, but directly to Magazine zum Globus AG. Essentially one can say: Migros assumes that the debtors will continue to service the loan.

Now all that’s missing is Selfridges

With the sale of Globus’ operating business, the exploitation of the Signa Group’s luxury department store business is one step further. The KaDeWe department store group in Germany, which, in addition to the KaDeWe in Berlin, also includes the Alsterhaus in Hamburg and the Oberpollinger in Munich, took over Central in June because there was separate insolvency proceedings there. The only thing left in limbo is the future of the British department store group Selfridges.