Selfridges' bid to control Arnotts hailed 'fantastic'
Published 04/11/2013 | 01:00
RETAIL EXPERTS have celebrated the news that London retail chain Selfridges is bidding to take over Arnotts.
It emerged over the weekend that the London retail giant, controlled by billionaire Canadian businessman Galen Weston is vying for a stake in Ireland's largest department store. Mr Weston also owns Brown Thomas – meaning the two largest and most famous department stores in Ireland could join forces.
"It will be fantastic if they succeed," said retail consultant Eddie Shanahan, a former head of merchandising at Arnotts. "It would mean one of the most professional retail management teams in Europe, if not the world, will come to the rescue of a company that's been struggling."
Selfridges is bidding for a stake in Arnotts that was put up for sale by bad bank IBRC and Ulster Bank, who took control of the company in 2010. The banks control about €315m worth of loans attached to Arnotts. Many of these were accumulated by the store's troubled purchase of properties in the Abbey Street area of Dublin known as the Northern Quarter, where Arnotts' flagship outlet is based.
These loans form part of a portfolio called 'Evergreen', which also includes loans attached to the Topaz garage chain. The first round of bidding for 'Evergreen' has already been completed; the second stage of the bidding process is being announced today. Bidders who offer more than the value placed on these assets by an independent assessment will move to the next round.
Private equity firm Palladin Capital is also rumoured to be bidding for the Arnotts loans.
"If Selfridges take control, they will not try to compete with themselves," said Mr Shanahan. "We will see Arnotts become less like Brown Thomas, not more.
"Selfridges have a very experienced, global team who understand that the iconic Arnotts brand has a place in the market – mid-range is important, and it's coming back."
Arnotts lost its way, he said, by losing focus on its customers and trying to remodel itself on its high-end rival.
"In addition to its property woes, Arnotts tried to become too like Brown Thomas. It focused on someone else's customer, and forgot its own – raising price points and bringing in American brands that Irish people didn't recognise, for example. Selfridges would do the opposite – return it to the store it used to be, which emphasised value and offered a huge range," he added.