Selfridges hints at British Land deal

SELFRIDGES' chief executive, Vittorio Radice, yesterday fuelled speculation of a property deal with British Land over the Oxford Street store, as it emerged that the developer had increased its stake in the retailer to 6.3 per cent.

Mr Radice said the company, demerged from Sears in July, was keen to unlock the value of the landmark building and would consider talks with the group led by John Ritblat. However, he said any property deal would not take place before next year, when the pounds 99m store refurbishment programme comes to an end. "At the moment we have so much to do, but I would not rule out [a deal] in the future," Mr Radice said.

The chief executive revealed that Selfridges' chairman, Alun Cathcart, had met with Mr Ritblat last week, but dismissed the talks as a "normal meeting with a shareholder".

British Land has been steadily buying shares in Selfridges since August, sparking rumours that it was looking at gaining control of the 540,000 sq ft Oxford Street site. Property analysts said Selfridges' stock market value is currently below the pounds 322m value of the London department store, making an attractive property play for Mr Ritblat, one of the City's most famous developers.

Peter Williams, Selfridges' finance director, yesterday said the property deal could take the form of a sale and leaseback. Selfridges could also raise money by issuing a bond backed by the Oxford Street site.

His comments came after Selfridges reported a fall in interim pre-tax trading profit to pounds 8.6m from pounds 9.2m, ahead of analysts' expectations. Turnover was down to pounds 126.8m from pounds 131.4m, with like-for-like sales 3.5 per cent below last year.

Mr Radice said trading had been hit by the refurbishment programme, the wet summer weather and lower tourism spending. However, business picked up in the second half, with sales up 3 per cent over last year, he added.

The company was set to benefit from its new Manchester store, opened earlier this month, the chief executive said. The store had attracted an average of more than 100,000 customers a day in the first two weeks of trading, he said. The shares closed up 1.5p at 209p.