Investment: Selfridges to review Oxford Street site

SELFRIDGES, the department store group, is to undertake a review of its flagship Oxford Street site in London as a pounds 100m seven-year refurbishment programme nears completion.

In addition to the upgraded 90-year-old store, the site includes Selfridges Hotel, a car park and several floors of office and warehouse space that may be better used as retail selling space. An update is expected at the time of the company's interim results in September.

The announcement came as Selfridges announced better- than-expected full- year results following its demerger from Sears last summer.

Trading profits were 14 per cent ahead at pounds 24.2m, excluding pounds 7.6m of exceptional charges arising from the demerger. There was further good news on current trading; sales at the Oxford Street shop are ahead by 7 per cent on a like-for-like basis.

Sales at the new store at Trafford Park in Manchester are ahead of expectations, with a profit contribution of pounds 400,000 in the first 20 weeks' trading.

But analysts said that if Selfridges had to pay rent on the Oxford Street store, where it owns the freehold, the group would barely be breaking even.

The shares - up by 8p to a new high of 250p yesterday - are trading on a forward multiple of 19 times current-year earnings forecasts, a level that is starting to look quite high. On the plus side, the 3.6 per cent stake held by British Land offers bid support, as does the Oxford Street freehold valuation of 212p per share. A weak hold, say analysts.