Sock Shop, one of the UK's most familiar high street brands, has blamed excessive rent rises at its two former Grafton Street outlets as the sole reason for exiting the Irish market.
The popular accessories retailer closed its final store at 53 Grafton Street a few weeks ago after refusing to pay a €70,000 increase on the annual €65,000 rent, which amounts to a staggering 108 per cent rise on a five-year rent review.
Ms Kirsty Martindale, national sales manager for the Tulchan group, which owns both the Sock Shop and Jumper brands, said she was "absolutely gutted" at having to leave Ireland but claimed there was "no point in continuing the business here" with such "excessive rent increases".
The firm's departure has prompted property experts here to warn of increasing resistance from multinational retailers to pay massive rental overheads simply to maintain a presence on the country's premier shopping street.
Mr Declan Stone, managing director of Colliers Jackson Stops and a director of that agent's retail division, accused landlords of "losing the run of themselves" in seeking ever-higher rent reviews and suggested the zone A benchmarking system should be scrapped along with long-term leases in favour of the European short-term model.
He pointed out that companies are paying disproportionately high rates on a small zone A outlet compared to a large-scale store and said the whole concept of benchmarking rent reviews needed to be "revisited and revised". He also claimed the market "would be far more liquid" if short 10-year leases were introduced rather than locking firms into 20 to 30-year contracts.
Mr Stone, who negotiated the property deal for major UK fashion retailer Oasis, claims there is a cooling off in the retail sector and predicted that the stratospheric rises in rental values on Grafton Street will "moderate over the coming years". Palmer McCormack director, Mr Eoin Feehey, agrees the rental structures here are in "urgent need of change" and dismissed zone A benchmarking as "totally arbitrary".
The property firm is selling the leasehold on Sock Shop's final outlet for €300,000 with an annual rent of €130,000. However, this rate could end up in arbitration if the new tenant refuses to accept the landlord's rent review. It's understood Sock Shop never agreed to pay the €70,000 increase and maintains the rent at €65,000 per annum.
