On Henry Street, the fifty/fifty shareholders in Arnotts have squared up to try to buy each other out. Interestingly, Blue Gem Capital, owners of London’s upmarket Liberty Store, have joined the US finance house, Apollo Capital, in the ownership battle with solicitor-cum-property developer, Noel Smyth. Smyth’s Fitzwilliam property vehicle is backed by London & Regional, which is controlled by the billionaire Livingstone brothers.
Whether or not Blue Gem, gets involved in running Arnotts, it seems an aptly-named suitor - the iconic brand that is still proudly championed by thousands of fading blue Dublin GAA jerseys has a strong retail future - the same cannot be said with certainty about Clerys.
"While it is only a couple of hundred metres away from Arnotts in distance - Clerys is stranded in a different retail universe in terms of location and customer reach."
It’s true the 170 year-old store has been blighted by bad luck and difficult circumstances since its purchase by Gordon Brothers of Boston three years ago for a nominal price and about €14m in acquired borrowings.
Water, in different forms, has been key to some of its problems; the store was forced to close due to flooding in 2013 and the frequency of O’ Connell Street protest marches against water charges and other austerity measures, have caused valued weekend shoppers and browsers to stay away, and to perhaps patronise Arnotts instead.
But, Clerys suffers from wider demographic and branding challenges. Its traditional customers are literally dying out and younger replacements have not been drawn in anything like sufficient numbers by the concessions the store has managed to attract nor by the semi-permanent ‘Mega Sale’ banners that drape its windows.
Gordon Brothers are retailers - not vulture capitalists. They did not intend to flip a weakened asset, as many overseas investors have done, but it seems clear that IBI has been commissioned to try to find a buyer for Clerys.
Price, and the level of borrowings still on Clerys books, will prove a key factor in determining the purchaser, who may benefit, at least in location terms, from the completion of the north-bound Luas line over the next two years.
But unless a new iconic retail brand can be attracted to hitch their skirts on this Old Lady, her longer-term future may not be bright. That retail brand will need to attract those who take the tram to the southside Mecca of Dundrum, to travel in the other direction as well: a brand such as Liberty perhaps, if it wasn’t set for Arnotts; or John Lewis, which showed some previous interest; or even our own Avoca.
If not, then Clerys may go the way of McBerneys on the Quays and become another of Dublin’s retail relics. The months ahead may prove historic in more ways than one on Ireland’s Main Street.
