Between now and Christmas Eve more than 40,000 children will visit Santa at Clerys department store in Dublin. This requires a roster of six men with white beards and red suits working two to a shift. Being jolly is obviously hard work.

Santa's grotto at Clerys has been part of many people's childhoods and it ranks up there with other traditional aspects of Clerys business - from the clerical overcoats and ladies' bloomers to flannelette sheets. But although Clerys seems the same from the outside, inside it is changing beyond recognition. A major refurbishment programme of the 146-year-old store is under way, aiming to make Clerys as attractive to high-spending young shoppers as it used to be to their mothers and grandmothers.

In some ways Clerys remains a traditional company. It is one of the few family-owned department stores left in Europe and for many years it was steered by Mary Guiney, widow of Denis who bought the company for £250,000 (€317,430) in 1941. Denis Guiney was a man before his time. He saw the advantages of bulk buying and the quick turnover of goods long before supermarkets or discount shops came into being. He was also ahead of the posse in his use of high-powered advertising to promote goods in his store.

Mary Guiney took over as company chairwoman on his death in 1967. She still holds this position today although, at 99 years of age, she has recently stopped attending board meetings. Denis Ryan, the company's vice chairman also has a long association with Clerys. But the rest of the six-strong management team is under 40 years old and are the architects of the changes under way.

So far Clerys has spent more than £15 million refurbishing its ground floor. The lower ground floor is now nearing completion and there are still two floors to go. This will happen over the next two years and the final redevelopment bill will exceed £25 million.

Clerys employs about 500 people and the group turnover is £46 million. Its business split is roughly 60 per cent clothing and 40 per cent household items. The O'Connell Street store operates a mix of concessions and "own bought" goods. During November more than 300,000 people visited the store, up a fifth on the same month last year.

Clerys has always enjoyed a loyal customer base, but in recent years the average age of its customers was more than 45 and rising and young shoppers were certainly not thinking of Clerys when it came to buying trendy clothes. By leveraging the appeal of designer labels Clerys has been succeeded in reversing this trend. The decision to locate Bay Trading (reasonably priced young fashion) at the busy North Earl Street entrance was designed specifically to draw teenagers into the store. A second target market are the twenty somethings working in the International Financial Services Centre for whom Clerys is only a short walk away.

"We began our store redevelopment in 1998 and we're now half way there," says group marketing manager, Ms Liza Jones. "The new look Clerys represents a change in direction for the store, both in terms of market positioning and future growth strategies. The decision to refurbish was a direct response to a number of factors. The economic climate in Dublin is very strong, the retail sector is growing fast and we also needed to respond to a younger market. Overall the time seemed right for expansion and sales are up around 20 per cent this year.

While there are probably only a handful of people left who remember Clerys' genteel afternoon tea dances, anyone who grew up in Dublin in the 1960s will still recall a Clerys with broad mahogany counters and a chute cash system. Liza Jones insists that Clerys has no wish to alienate its traditional customers and that it will continue to cater for their needs alongside those of high spending younger consumers.

But it needs to move with the times. Three weeks ago the Clerys website was launched. "We are getting around 1,000 visits a day to the site," says Liza Jones.