It still boasts clusters of luxury goods retailers adored by label-loving consumers, while its prime location makes Grafton Street an unlikely candidate for "recession road". But ominously, even Dublin's "premier" shopping street can't escape the chaos that is engulfing the economy. As retail sales plunge 8 per cent and broke shoppers shun massive discounts, a walk down the street reveals evidence of the vulnerable state of the Irish retail sector, writes Laura Slattery. Take the trip...
TED BAKER
The UK designer fashion label, which had the honour of dressing James Bond actor Daniel Craig in Casino Royale, is finding it can’t ride out the recession without taking a hit. The retailer endured a slowdown in its sales growth and a fall in margins in the pre-Christmas period, with profitability hurt after it joined the rush to offer discounts to cash-strapped customers. On Grafton Street, it trades from a unit formerly occupied by erstwhile Kate Middleton employer Jigsaw.
EMPTY UNIT
This 102 sq m - i.e. relatively tiny - unit used to be occupied by ladies’ fashion vendor Warehouse before it upped sticks to a much bigger outlet around the corner on South King Street. The unit was temporarily transformed into a Christmas calendar store and is now empty. But although Warehouse may have escaped its claustrophobic former home, it hasn’t escaped the credit crisis: its owner is Mosaic Fashions, which is backed by stricken Icelandic investment group Baugur.
O'BRIENS
Founder Brody Sweeney admits that it is a tricky time for the business as the shrinking Irish orkforce discovers the cost-conscious joys of a packed lunch. Last year, it was on track to record its first decline in like-for-like sales in 20 years. With consumers cutting back on thick-cut sandwiches, Grafton Street’s high rents have become more diffi cult to swallow, and the lease on this unit is one of several on the street that are for sale. Sweeney’s solution? Make better sandwiches.
TOMMY HILFIGER
The ubiquitous American luxury sportswear brand is one of the newest arrivals on the street, where it is paying one of the highest rents. On its opening in November, country manager Sunil Shah was reported to say that the group was undaunted by the slump because “fashion doesn’t stop just because we are in a recession: it evolves around it”. Hilfiger’s figures continue to evolve: European
like-for-like store sales were up 3.4 per cent in the six months to September.
MCDONALD'S
McDonald’s staked its claim to recession proof status this week by announcing an 80 per cent rise in global profits. The golden arches gang cited demand from consumers seeking cheap treats, although for some, “recession cuisine” is more about patronising a mid-priced burger joint than ordering a Mc-Flurry. Salad sales, incidentally, are static: it’s the burgers people are after. As Burger King’s meal deal poster declares: “Hey Mr Cowen! How’s this for a recession buster?”
CHAMPION SPORTS
The chain was bought by investors including developer Bernard McNamara and financier Bernard Somers through investment vehicle PCP One for ¤60 million in 2006, when it said it would attempt to double the size of the then-17 strong chain. According to its website, it now has 23 stores. Its last filed accounts before it became an unlimited company relate to 2006, a time when it was “buoyed by strong economic conditions, particularly consumer spending and confidence”.
A-WEAR
Remember the private equity boom of pre-crunch 2007? That was when the youthful Irish women’s clothing retailer, which began life as Gay Wear in the 1960s, changed hands, with a management buyout backed by private equity group Alchemy buying the chain off Brown Thomas for €70 million. The new owners have endured a trading environment where, according to the CSO’s retail sales index, clothes sales volumes are down 6.7 per annually, forcing bigger discounts.
MARKS & SPENCER
Often seen as a bellwether of the British economy, M&S reported its worst quarterly sales performance in a decade earlier this month and said it would axe 1,230 jobs. But the 27 stores it earmarked for closure only included one Irish store - Newtownards, Co Down, with its network of 18 stores in the Republic escaping. Executive chairman Stuart Rose has been a vocal critic of a polarised UK economy, in which “the West End can’t get enough diamonds”, but the poor are getting poorer.
BOOTS
The UK retail pharmacy chain enjoyed a record Christmas, with a 4.2 per cent jump in revenues from its 3,000 shops across Europe in the last quarter. In the year to the end of March 2008, Boots’ Irish turnover soared 15 per cent to €262 million and operating profit rose 13 per cent to €19 million. With 51 outlets here and three more due to open by May, including one at Dublin Airport, Boots Ireland’s Richard Bradley says “more accessible properties” will aid its expansion plan.
VODAFONE
Vodafone’s two units on Grafton Street are among the six telecoms stores on the street, but the industry’s big players are not enjoying the same phenomenal boom-era growth. Vodafone
Ireland’s monthly average revenue per user (ARPU) dropped 5.7 per cent in the first half of last year to ¤42.50. Mobile broadband is probably still in its infancy, but its prospects could be derailed by recession: in December, Vodafone said it was to cut its Irish workforce by 150 people because of the slump.
DUNNES STORES
This clothes-only outlet is something of an anomaly in the Dunnes chain, which as a major supermarket group could be expected to be in the doldrums as a result of the 7 per cent annual drop in food sales. But shoppers’ increasing willingness to travel to Northern Ireland to take advantage of the weak sterling has been matched by grocery retailers, who are opting to bypass Irish suppliers and import cheaper sterling-priced goods. Dunnes is still expanding and recently announced 230 new jobs.
KAREN MILLEN
The glossy women’s clothing retailer is part of troubled Icelandic-owned group Mosaic, which has been stung by the collapse of Kaupthing Bank. Credit insurers have also withdrawn cover, with most suppliers now only providing stock to Mosaic stores that pay on delivery. But Mosaic was adapting to recession even before the Icelandic trouble, with Irish unit chairman Ian Galvin saying last July that it no longer carried reserves of stock.
HMV
Always one of the stores with the longest queues of last-minute Christmas shoppers, HMV now pins its fortunes on the DVD and games markets rather than music sales - whether slump-struck consumers regard these as discretionary items or must-haves now more expensive entertainment options are off the menu remains to be seen. UK competitors Woolworths and Zavvi have fallen, but
HMV managed a 1.6 per cent rise in UK and Ireland sales in the six months to October.
BEWLEYS
Bewley’s presence on Grafton Street owes as much to tradition as it does to commercial sense, as it represents only 7 per cent of Campbell Bewley’s turnover. It controversially closed in 2004, before re-opening a year later in partnership with Café Bar Deli. Since then, it has seen many menu changes - and price increases. It also survived a protracted but now resolved row with landlords Trinity Holdings. Crucially, its next rent review is not until 2013.
BARRATTS
Although it continues to trade as normal, Barratts is one of clearest reminders on Grafton Street of the effects of the downturn and credit crunch. Both Barratts and Priceless Shoes, which operate 18 stores in the Republic, were placed in administration in the UK this week by parent group Stylo. Deloitte, the administrator, said it hoped to rescue the UK stores by negotiating new contracts with creditors and landlords. It remains to be seen if a similar feat can be achieved here.
NINE WEST
The UK and Ireland licence holder of this US footwear brand is the up-for-sale Shoe Studio Group, but this now closed Nine West outlet was already making its exit plans as early as last March when the lease went up for grabs. It was eventually taken up by Aldo, a Canadian shoe and accessories store, for higher-than-expected key money. The prospect of a steep rental increase was reportedly what prompted the decision to abandon the well-heeled shoppers.
BROWN THOMAS
The department store’s clientele is clearly assumed to be immune to the slump: in November, Brown Thomas opened new jewellery rooms featuring the likes of Tiffany & Co and Cartier. But within the hallowed walls of the store, regulars may notice some evidence of the economic chaos that surrounds them: Shoe Studio Group is to close its luxury footwear concessions after parent Mosaic Fashions - a victim of Iceland’s economic woes - decided to offload it.
PAMELA SCOTT
The family-owned chain has been on Grafton Street for 33 years and is relatively unusual among clothing retailers in that it sells everything from casual wear to cocktail dresses at a wide range of price points. In October 2008, it decided it was a good time to expand its skiwear collection. It is part of the Flairline Group, headed by Seán Barron, which also includes Richard Alan, Ashley Reeves and Lisa Perkins outlets. Pamela Scott began a “mid-season sale” on December 3rd.
WEIRS
“Even when there isn’t a boom, there’s a good business,” said managing director David Andrews of Grafton Street last May. Globally, however, demand for jewellery has lost its sparkle, although precious metal prices have held up due to volatile equity and currency market conditions. Valentine’s Day buyers not tempted to pop over to Accessorize for a plastic cocktail ring can browse
seven jewellers on the street: Weir’s, Fields, Rocks, Boodles, Swarovski, West and R&C McCormack.
ULSTER BANK
Ulster Bank group this week announced it was shedding 750 jobs from its Irish operations, including
550 from the Republic, and merging First Active with Ulster Bank. This means that the sign above this corner unit on Grafton Street will either be rebranded Ulster Bank or close with business transferred to the nearby Ulster Bank branch. Earlier this month, parent bank Royal Bank of Scotland posted the biggest corporate loss in British history.
