Traffic key to road ahead for Arnotts, says Selfridges chief

The acquisition by Selfridges of Arnotts on Monday might have been well flagged but it nonetheless represented a major shot in the arm for the retail industry here. It secures the future of the country's oldest and largest department store just months after its long-time northside rival Clerys was shuttered amid much controversy.

It's a major signal of confidence in the Irish economic recovery story from one of the world's most professional retailers, which has an established track record here with Brown Thomas.

The future should be bright for Arnotts, a point made to me by Selfridges managing director Paul Kelly in the boardroom of the Henry Street store this week. The strategy will take a few years to implement but Selfridges, which is owned by Canadian businessman Galen Weston and his Irish wife, Hilary, is committed to investing in Arnotts and bringing a host of premium brands to the historic northside venue.

This should bring increased employment to the store and have a positive ripple effect for other traders in the area.

The purchase by Selfridges could prove well timed. After all, the Irish economy is currently the fastest-growing in the EU, unemployment data yesterday showed another decline in jobless numbers to 9.3 per cent, tourist numbers are heading for record levels, and the pre-election expansionary budget will put money into people’s pockets from January.

Tom Burke, director of Retail Ireland, a unit of employer group Ibec, is forecasting Irish sales this Christmas of €4 billion, up 3.5 per cent on 2014. Retail sales in the year to date are up 2.5 per cent in value terms and Burke is "cautiously optimistic" about the recovery, though sales are 12 per cent below the pre- crash peak.

Kelly said Arnotts was on course to post a single-digit percentage increase in sales this year while its Brown Thomas chain was also trading well. Yet he had a bee in his bonnet on Monday and it had to do with aspects of how Dublin is run.

“We have to be thinking about making this city a great city,” he said. “We’re going to make it more difficult for people to come into town . . . Some people want to use cars and you can’t just say: ‘Stop doing that.’ We’ve got to make sure there is a proper traffic management place for the city, not just for today but for the future.”

Proposed car ban

This is a reference to a recent proposal from

Dublin City Council

and the

National Transport Authority

to ban cars from the College Green area permanently along with reserving parts of the quays and other main routes for buses, taxis and cyclists with certain provisions for deliveries.

This could effectively render a couple of the city’s biggest car parks redundant, including the one at Arnotts. It’s part of a plan by the council to make the city centre more pedestrian-friendly while also curbing daily car commuting.

But retailers argue the issues around cars using the city centre are based around commuters at peak times rather than those visiting for shopping. “I don’t know too many people who drive into the city centre at 8.30 in the morning to go shopping,” one senior retail executive said to me this week. “This plan is mad.”

Retailers are also sore that the plan was drafted without their input, although it has since been put out to consultation.

Unreliable public transport

Restricting car traffic is a particular issue for Arnotts, which sells a lot of high-value, bulky items that can’t easily be brought home on the bus. Some 35 per cent of shoppers use cars to access the city, partly for convenience but partly because public transport is not reliable. Dublin’s public transport options lags those of many other European capital cities.

In the UK, celebrity retailer Mary Portas produced a report for government four years ago on the future of the high street, including a review of parking strategies. She argued for a "more flexible, well communicated parking offer" for British high streets to prevent their demise. On foot of her report, the government introduced a number of changes to planning rules and parking regulations.

In Dublin, city-centre retailers fear restricting traffic would result in people switching to out-of-town centres, where parking is plentiful and free or cheap.

Kelly’s criticisms of plans to curb car traffic might be self-serving but he’s an experienced shopkeeper and it would be foolish to ignore his warning. It would certainly be ironic if Arnotts future growth was compromised by a local policy decision rather than macroeconomic issues.

Twitter: @CiaranHancock1