The London store alone is valued at £350m.While Galen Weston, of the immensely wealthy Weston family from Canada, is the front-runner to win Selfridges, analysts believe he will be fortunate to walk away with the prize unopposed.The Scottish entrepreneur Tom Hunter, who has been linked with Allders and House of Fraser, has tabled an offer believed to be worth £510m, and may be able to use a higher rival bid to persuade his backers to stump up more firepower.The secretive billionaire Reuben brothers, who have made their money from metals trading have sent a letter expressing interest, and Selfridges' chief executive, Peter Williams, is said to have drawn up plans for a management buyout backed by Blackstone, the US owner of the Savoy hotels group. A consortium led by the US investment bank Goldman Sachs is also reported to be monitoring the situation, as is Robert Tchenguiz of the property group Rotch.And, despite his denials, it would be rash to rule out Philip Green, the serial entrepreneur who has amassed a fortune from overhauling such retail names as Olympus Sport, Bhs and Arcadia.The battle began when Selfridges announced it had received an approach on 9 April, believed to be from Mr Hunter. But the group's future was thrown into doubt in March when Mr Williams's predecessor, the flamboyant Vittorio Radice, decamped a five-minute walk from Selfridges up London's Baker Street to the head office of Marks & Spencer. Mr Radice transformed Selfridges' Oxford Street store, building more escalators and opening up the floors to colourful displays and themed weeks to stimulate shoppers' interest.The company also has two stores in Manchester.
Another is due to open in Birmingham in September, while others are set to follow in Glasgow, Leeds, Bristol and Newcastle.In April Mr Cathcart sought to end the uncertainty over Mr Radice's departure by asking for preliminary bids by last Tuesday, but those positions have been refined by intense behind-the-scenes negotiations throughout last week and over the weekend.. "The probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level." "The probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level." Well, who would have thought it? The Us Federal Reserve has finally admitted that inflation can be too low. The Fed's policy statement last week suggests that inflation – rather than growth – is top of the policy agenda. But, unlike the 1970s and 1980s, the Federal Reserve will now be aiming to keep inflation up: America's central bank needs to find the monetary policy equivalent of Viagra.Why should anyone worry about inflation being too low? There are two obvious reasons.First, low inflation might simply be a symptom of inadequate demand.
If inflation is too low, it's likely to be associated with depressed profits and high unemployment. Neither of these is desirable, thereby suggesting that the central bank should choose to boost demand through lower interest rates. This is the standard cyclical concern.Second, low inflation could be a cause of inadequate demand Let's say, for example, that you've borrowed £100. You did this on the expectation that inflation in the first year would be, say, 2.5 per cent But suppose that actual inflation is zero. Under these circumstances, the real, inflation-adjusted, debt level at the end of the first year is 2.5 per cent higher than you thought it was going to be. You might choose to react to this either by borrowing less in the future or repaying the existing debt more promptly Either way, you choose to spend less. Repeat this at the national level and you suddenly discover that there's a major shortfall in the level of demand which prompts a further inflationary undershoot.
This is a less familiar structural concern.Of course, the central bank can offset this second problem in normal circumstances by lowering the interest rate. If the interest rate is also lower than expected, the debtor is back to square one. Yes, the real debt level is higher but the cost of servicing that debt – the interest payment – is lower. The two factors cancel each other out.Or at least that would be true if interest rates were always able to fall. At very low interest rates, however, this might not be possible. If inflation is 2.5 per cent lower than expected and interest rates start off at 5 per cent, the central bank merely has to cut interest rates by 2.5 per cent.
