Nightmare on Main St will have a long run
Eighteen months since her last visit to the heartland of the country, Louise McBride returns to Athlone to find out how the retailers of Church Street are coping in their third bitter year of recession
IT'S three years since the recession officially hit Ireland. Walk down the main street of any Irish town and you'll see the casualties it has left in its wake. Athlone -- a town bang in the centre of Ireland -- is no different.
The Sunday Independent returned to the main street of Athlone last week to see how businesses there have grappled with the recession. Some have sadly fallen, while others are struggling to keep their head above water.
THE GIFT SHOP OWNER
David Fitzgerald's gift shop, The Gift & Design Centre, has been in his family for almost a century -- but the recession is forcing him to shut up shop.
"I've been trading for 13 years and before that, the family were here since 1919," said Fitzgerald. "So we own the building -- there's no rent or mortgage to pay. About two-and-a-half years ago, people stopped buying houses. Once that happened, they didn't need the lamps, mirrors and so on that the shop sells."
The collapse in sales wreaked havoc with Fitzgerald's business -- as did the severe cold snap which hit Ireland in the run-up to Christmas 2010.
"The snow and ice of last Christmas completely annihilated trade," said Fitzgerald. "We couldn't come back from that."
Fitzgerald also said that "pop-up" shops which opened up nearby, only to pull out after six to 12 months, had damaged local businesses.
"I'm devastated that we're closing down," he said. "How would you feel if you had to make yourself redundant?"
THE MENSWEAR SHOP
Conor McGorisk, the owner of McGorisk for Men, is also angered by pop-up shops, which he believes are being enticed to the town by offers of cheap rent. "They've damaged independent businesses that are trying to survive," said McGorisk.
McGorisk isn't seeing any sign of a pickup in the town. "It's got worse. A lot of businesses have gone. There are no new jobs. I honestly can't see anything improving over the next few years."
Before the recession, McGorisk had primarily sold casual menswear as well as some suits -- but this has all changed.
"I started to get into wedding hire about a year ago because people will always get married. That's been good -- and it's consistent. I've made my casuals a smaller part of the business -- and my suits a bigger part. There's still demand for suits and there's not as many competitors in suiting as in casual gear. That (wedding hire and suits) is my light at the end of a long and narrow tunnel."
Garry Hughes, who owns The Olive Grove restaurant with his wife, Gael Bradbury, has been fighting tooth and nail for the business for more than two years now. "There's been a slight pick-up," said Hughes. "Last year, our trade was up on the year before. But the spend per head is still down. People want value for money. All of our staff took a pay cut -- but we've not laid anyone off."
Hughes bought the current premises for the Olive Grove in August 2007 -- when property prices were still high. "No one put a gun to my head to buy this premises -- but we borrowed to the hilt," said Hughes.
He believes that the way forward is to work with local businesses.
"You see more and more small businesses closing. It's this latent unemployment that needs to be stopped. We're trying to shop with local suppliers and we're putting on our menu where we're sourcing our food from."
THE DEPARTMENT STORE
Rosie Boles, managing director of Burgess Department Store, believes this year is tougher than last -- something she attributes to a new reluctance among women to spend money.
"Women took longer than men to stop treating themselves," said Boles. "I think we probably have another few years of recession left. I'm an optimist at heart but, personally, I found myself a bit down in the dumps. Being at the top of a business can be a lonely place to be."
Boles, however, has not had to lay off any staff -- or cut wages.
She believes the recession has changed the retail trade "forever". "When you see closing down signs going up around the town, it's sad. There are opportunities out there though -- you just have to be brave."
THE CREDIT UNION
Mick Dillon, the chief executive of Athlone Credit Union, believes the recession has lowered the expectations of people in the town. "They are not going to the same expense on Communions and Confirmations," said Dillon. "They're taking less holidays. They're not borrowing as much. Where someone would have borrowed €5,000 from us before, they're now borrowing €4,000."
Dillon expects people to have even less money in their pockets this time next year due to mortgage interest rate rises and higher taxes. "As a credit union, we're subject to the vagaries of people's health and wealth. So people will be looking to extend their loans. We're as accommodating as we can be (on loans) but with the new credit union regulations, we may not have as much wiggle room."
THE ESTATE AGENT
Although Healy Hynes, managing director of Hynes Real Estate Agent, says that house sales are "a fraction" of what they were during the boom years, he believes things are picking up.
"There is still a lot of fear out there and concern about financing," said Hynes. "But there is also a lot of pent-up demand. Enquiry levels are up about 65 per cent on the same time last year. Sales follow through on that. There are bargains out there and there's a huge amount of cash buyers. There are people making deals now that they'll be telling their grandchildren about in a few years time."
As negative equity has forced many homeowners to stay put rather than to sell their home and trade up, vendors have started to "think outside the box", according to Hynes. He is acting for a homeowner who is willing to swap his house with that of a potential buyer if such a swap would secure a sale.
Mark Cooney set up his own practice, Mark Cooney Solicitors, in October 2009. "It's hard to make a living as a solicitor in Athlone now," said Cooney. "It's difficult to get paid by clients."
Conveyancing work had all but disappeared in Athlone about a year-and-a-half ago due to the collapse in house sales. "There's a little bit more happening now -- but not much," said Cooney. "A lot of solicitor practices had conveyancing bases before -- that's just not there anymore."
Cooney sees the recession manifesting itself in the courts.
"A lot of builders' providers are suing builders for unpaid debts," said Cooney. "There's been quite an increase in people taking enforcement proceedings to get a spouse or partner -- who may have lost his job -- to pay child maintenance."
Levina Reeves was distraught when she closed her art gallery, Reeves Art Studio, on Church Street, Athlone, last March -- after opening it there 13 years ago. She says that her bank's decision to pull her overdraft was the straw that broke the business's back.
"From August 2010, it was a real hard fight to keep the business going," said Reeves. "I could pay my rents and rates -- but I had to let my staff go. I had 14 people employed. I would never feel comfortable employing anyone again because of the way I came out of this."
Reeves said that the lack of an overdraft left her with no purchasing power to buy the stock needed to keep her business going.
"As my suppliers were strangled as well, they were insisting on an upfront payment before they'd deliver anything. So I had customer orders but I couldn't fulfil them. I was apologising to people when they came into the gallery as the shelves were bare."
Reeves has set up her business from home since. "I have all the art stock I didn't sell in the hallway. My intention is to sell it in car boot sales and farmer markets. I'm still getting orders for my picture framing service through word of mouth."
Chris Vos, general manager of the Prince of Wales Hotel, says the hotel had a poor start to the year because of the severe cold weather and water shortages in the town.
"Things have picked up in the last few months but we are trading well below expectations and will require a phenomenal summer to catch up with the losses of winter," said Vos. "Tourist numbers were down last summer though and I expect the same this year." Vos says that while the hotel is viable, "paying interest and capital on loans remains difficult".
"Hotel rates continue to be squeezed. This is made worse by below-cost selling in hotels that are only trying to generate cash flow and not make a profit. This will have a knock- on effect for years to come. Ireland now has the cheapest hotel rates in Europe but we operate with higher than average costs. Simple logic says this cannot be sustained."
Sunday Indo Business