CARLUCCIO’S, THE popular cafe and restaurant on Dublin’s Dawson Street, closed for business yesterday, with its operators saying it will not reopen unless it can agree a rent reduction with its landlord.
The outlet, which employs 60 people, has been seeking to negotiate a reduction in its rent since December 2008, according to a statement issued yesterday, and has since then implemented “a pause in rental payments”.
Efforts to agree a lower rent with the landlord made no progress at all, according to one source. It is understood rent has not been paid since early 2009.
The restaurant is operated by Carluccio’s Ireland Ltd, a company owned by Ron Bolger, chairman of Irish Food Processors; Peter Murray, a former chairman of Anglo Irish Bank; and investors organised by NCB Stockbrokers.
The restaurant is in a building on the corner of Dawson Street and Duke Street that formerly housed the Graham O’Sullivan restaurant, and which was purchased in November 2006 for approximately €17 million.
Carluccio’s subsequently agreed a 20-year lease with the landlords, at an annual rent of €680,000. The building was bought by a group of investors assembled by D2 Private, a property investment business founded by David Arnold and Deirdre Foley in 2004. D2 manages the building on behalf of the investors, who are members of a partnership called the Duke Co-ownership partnership.
It is understood Jonathan FitzPatrick, son of the former chairman of Anglo Irish Bank, Seán FitzPatrick, is a member of the partnership. There was no response to a request for a comment yesterday from D2 Private, which banks with Anglo Irish Bank. Jonathan FitzPatrick could not be contacted.
In a statement yesterday, Carluccio’s said its “rent was struck at the near height of the property market in 2007, but both economic and property market conditions have deteriorated dramatically since then . . . The company has been very successful in reducing its other group and operating costs, including labour, so that they are aligned with current levels of trade, but to date has been unable to reach an agreement on rent.”
It said its position in relation to seeking a reduction in rent was consistent with the approach of many other businesses in the current economic environment, especially those operating in the hospitality and retail sectors.
The company said it appointed an independent financial adviser to assist in advancing discussions with its landlord in April last and had submitted a formal offer for a new rental agreement.
One source said the restaurant, which serves approximately 5,000 customers per week, will close for good within a week if there is no change in the position of its landlord.
Carluccio’s Ireland has the Irish franchise for the UK-based Carluccio chain, founded by Antonio and Priscilla Carluccio. The company is now quoted on the London Alternative Investment Market. The Irish company had plans at one stage to open a number of outlets in this jurisdiction.
