Tuesday 23 January 2018

Under the clock: a fresh start for iconic Clerys

The historic 162-year-old department store is on the verge of a new takeover. But what does it have to do to prosper in a rapidly changing and cut-throat retail market?

Customers queue up outside Clerys on the day of its relaunch in 2013
Customers queue up outside Clerys on the day of its relaunch in 2013
Deirdre Foley of D2 Private
Deirdre Reynolds

Deirdre Reynolds

The clock is ticking for Clerys as the iconic department store looks set to change hands once more.

Three years after being snapped up by US firm Gordon Brothers, the embattled Dublin store is back on the market.

And Irish property investment company D2 Private this week emerged as the preferred bidder after reportedly offering €29 million for the O'Connell Street landmark.

As Clerys gears up to commemorate the centenary of its destruction during the 1916 Rising next year, economist Ronan Lyons says it's good news for the capital: "The fact that there is interest in something like Clerys is a good indication of domestic economic recovery. To some extent, that's Dublin-led at the moment."

"When you're selling an asset tied to a particular location, whether it's a house or a shop, the price reflects what the future of the location is," adds the assistant professor of economics at Trinity College Dublin. "Compared to 18 months ago, the future of Dublin, in particular, and Ireland in general is bright."

Property developer Paddy McKillen, Tony Leonard's Clarendon Properties and hotel investor Tetrarch Capital are just some of the investors thought to have been in the race for the city-centre asset.

But it's business woman Deirdre Foley who it's believed will soon be handed the keys No 18 O'Connell Street.

Named one of Ireland's 50 most powerful and influential business women last year, the former chartered accountant set up D2 Private with developer David Arnold, father of actress Leigh, in 2004.

Since then, Foley - who's now the sole owner and CEO of the business, with offices in both Dublin and London - claims to have been involved in the buying and selling of an estimated €4 billion worth of real estate around the globe.

Just like its rumoured new acquisition however, the investment and development company has had a rollercoaster few years.

At the height of the boom, D2's bulging portfolio of prime London assets, owned by various syndicates of investors, had total debts of around €450 million.

And former Late Late Show presenter Gay Byrne, Senator Feargal Quinn and former Anglo Irish Bank chief executive Sean FitzPatrick were just some of the high-profile Irish investors to take a hit when receivers offloaded the city's Woolgate Exchange building for £265 million in 2013 - seven years after D2 had splashed £325 million on it.

Nonetheless, the sale, coupled with that of Marks & Spencer's headquarters in Paddington for €240 million, resulted in Foley clearing her debts and the company becoming one of the first to exit the National Asset Management Agency (NAMA).

Today the property supremo, who began her career in KPMG in 1992, "believes that D2 Private is ideally positioned to take advantage of opportunities that are arising in the real estate markets in Ireland and the UK", according to its website, and "plans to once again create a new real estate portfolio comprising of both Dublin and London", likely starting with Clerys.

It's not the first time the 162-year-old business has found itself on the other side of the checkout.

Since opening its doors in May 1853, The Palatial Mart - as it was originally known - has changed hands four times.

Two hundred years on, the face of Sackville Street may have transformed, but the department store's famous timepiece is still the meeting place for tourists and lovebirds alike, says historian Pat Liddy of Pat Liddy's Walking Tours: "Before mobile phones, people used to say 'I'll meet you under Clerys' clock'.

"Men would wait for up to an hour under the clock for their date, and if it worked out, they went to that other great clock on O'Connell Street, McDowells Jewellers, and bought the ring!"

"Dublin, like any city, has been through so many changes - so many churches and banks are now cafés and bars. And yet, here is a business that went through three bankruptcies and is still going to continue as, more than likely, our much-loved Clerys - albeit maybe [with] a different name. That in itself is saying something."

After rising from the ashes of the Easter Rising, the rebuilt shop was subsequently bought out by competitor Denis Guiney in 1941, and stayed in the family's stewardship for more than seven decades.

Faced with the twin foes of online shopping and the boom-time rise in suburban shopping centres, the traditional department store pumped €24 million into attracting a new generation of fashion-conscious shoppers in the noughties.

As the debt owed to Bank of Ireland spiralled to €26 million however, the Guiney family was finally forced to say goodbye to Clerys when it went into receivership in 2012.

Despite its struggles, including a freak flash flood which closed the store for four months the following year, stylist and personal shopper Marietta Doran says her clients still love sweeping down the grand staircase laden down with shopping bags: "When I was a student at DIT Mountjoy Square, I remember walking past Clerys' windows and being totally captivated, and it's still one of my favourite spots.

"Apart from offering top Irish and international brands, it's got a great atmosphere. My clients enjoy the whole experience of shopping - and Clerys is one of the few remaining department stores in Ireland that lends itself to that."

As well as yielding a tidy profit for Boston firm Gordon Brothers, who bought the store in 2012, once complete, the sale could also mark a triumphant return to the Dublin property market for D2.

But economist Ronan Lyons argues: "People get too focused on ownership. That was true when Guinness was sold 20 years ago, and it's true now with Aer Lingus.

"People typically want these things to stay in Irish hands. While it's good to see companies like D2 bouncing back, I wouldn't necessarily want Irish companies to overspend on buying back Irish assets either.

"For me, those two [things] are always somewhat in conflict."

"Ultimately, it's about day-to-day lives," he adds, "and whether a shop on the high street can make a profit. Who pays most for owning it shouldn't concern us."

Standing on the balcony of Clerys in 1913, activist James Larkin, whose statue still lords over O'Connell Street, was infamously arrested as he urged Dubliners to join a class war against their employers.

Over a century later, as commercial interest in the historic building peaks, Clerys' 140 employees are sure to be paying close attention to the latest chapter in the store's colourful history.

"As a cultural centre, O'Connell Street has totally lost its way, in my view," says Pat Liddy. "I'd hate to see Clerys going. People don't realise that the building they're looking at now is the old Imperial Hotel where Larkin addressed the crowd during the Lockout.

"It's much more than a department store - it's an institution."

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