Selfridges shareholder collapse to cost banks £7bn

Banks face losses of £6.6billion after a major Selfridges shareholder collapsed. 

Signa, which co-owns New York’s Chrysler Building and other department stores in Europe, has been hit by high interest rates and the cost of energy and construction.

Its two main firms have borrowed millions from European banks, according to estimations from JP Morgan.

Billionaire Rene Benko’s property empire – which co-owns London’s Selfridges and Brown Thomas & Arnotts in Ireland – filed for insolvency last week. 

The Austrian firm said it has struggled with ‘severe economic pressure’. 

A fire sale of Signa’s assets could be looming as creditors attempt to minimise potential losses.

Selfridges has said the insolvency would not affect customers.

Just 15 months ago the Weston family sold the firm to Central Group and Signa for £4billion in a 50:50 ownership deal. Last month, hotel empire Central bought some of Signa’s stake, making it the majority owner, and could now take full ownership.