BANGKOK: Thai luxury retailer Central Group said Tuesday it will buy a majority stake in three department stores in Germany from property company SIGNA Group, speeding up its expansion into Europe.
Privately-held Central will get a 50.1% stake in the Kaufhaus des Westens, or the KaDeWe, in Berlin, the Oberpollinger in Munich, and the Alsterhaus in Hamburg. The company, controlled by Thailand’s Chirathivat family, didn’t say how much the investment will cost.
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Central is one of several prominent Thai businesses looking for opportunities overseas as economic growth prospects remain dim at home following years of political upheaval. Others include CP Group, Thai Beverage PCL and private equity investor Bee Taechaubol, who is negotiating for a stake in soccer team AC Milan from former Italian Prime Minister Silvio Berlusconi.
Central’s first investment in Europe came in 2011 when it purchased Italian retailer La Rinascente SpA for 205 million euros ($230 million). The company also acquired Illum, the oldest department store in Denmark, in 2014.
The Thai company’s chief executive, Tos Chirathivat, said Tuesday that the buying spree wasn’t over. “Central Group will continue to acquire additional department stores with strong potential in important European cities,” he said.
Wolfram Keil, chief executive of SIGNA Retail, said the agreement with Central provided an opportunity for business expansion through the opening of new stores, though he didn’t say where.
Central aims to cater to the growing number of tourists from China and other countries in the developing world who head to Europe to buy designer goods. Earlier this year, Mr. Tos said the company plans to invest more than $1 billion this year, including in new malls in border towns targeting the expanding consumer class in countries such as Laos, Myanmar and Cambodia. Mr. Tos also said the company aims to open a new La Rinascente branch in Italy.
Domestic spending is weak in Thailand, with the latest data showing private consumption fell 0.2% in April from a year earlier. Deflation is also persistent. The consumer-price index has contracted for five straight months, and the latest reading showed a 1.27% on-year drop in May.
