Saudi Arabia’s sovereign wealth fund has agreed to buy a significant stake in department store firm Selfridges.

The Saudi Public Investment Fund (PIF) will partner with current co-owners Thai-based Central Group to take control of the retailer.

It comes after Austrian real estate conglomerate Signa, which had co-owned Selfridges with Central, collapsed into insolvency last year.

PIF will now take a 40% stake in Selfridges, with Central owning the other 60% of the business.

Last year, Central converted a loan into equity to take majority control of Selfridges but has now been able to buy the remaining Signa-owned stake for an undisclosed sum alongside PIF.

It comes three years after Central and Signa bought Selfridges for £4 billion.

Selfridges traces its roots back to 1908, when it was founded by Harry Gordon Selfridge.

The retailer has four UK stores – two in Manchester, one in Birmingham and its flagship site on London’s Oxford Street – as well as 14 other shops including Arnotts and Brown Thomas in Ireland.

The owners said the deal will also include new investment from PIF and Central to strengthen the retail firm’s position and future growth.

Saudi Arabia’s PIF is also the majority owner of Newcastle United Football Club, and also owns stakes in Heathrow Airport and London-based hotel group Rocco Forte.

Turqi Al-Nowaiser, deputy governor and head of international investments division at PIF, said: “We are pleased to be partnering with Central Group in Selfridges Group, one of Europe’s most iconic luxury department stores.

“This transaction allows Selfridges Group to build on its position as a premier retail destination.”

Tos Chirathivat, executive chairman and chief executive officer of Central Group, said: “We are glad to welcome our new partner PIF, and together we will immensely strengthen the Selfridges Group’s financial position.

“The group is ready to embark on a new chapter of development and growth supported by the shared long-term vision of its shareholders.

“PIF is Central’s partner of choice in this distinguished company, and we are confident that PIF’s proven global track record of investments combined with our luxury retail industry expertise, brand management skills and innovative approach, will allow Selfridges Group to continue to flourish for the benefit of all its stakeholders.”