The red-in-tooth-and-claw capitalism that operates in the United States is generally frowned upon in Europe, where fair treatment of employees and a concern by companies for their reputation act as moderating influences. The manner in which hundreds of employees at Clerys department store in Dublin were let go last week was, however, both shabby and disproportionate. People who had devoted much of their working lives to the company deserved better.
Clerys of O'Connell Street, one of the capital's original department stores, has been in decline for years. This was reflected in the establishment of in-store concessions as adjuncts to its core business. By 2012, however, the distressed company was bought for €13.6 million by Gordon Brothers, a US-based private equity group, in a bank receivership sale. News that the store was again on the market attracted a number of interested parties and Irish property group D2 Private and Cheyney Capital from the UK eventually emerged as successful bidders. Within hours, the new owners applied to the High Court to have a liquidator appointed on the grounds that Clerys' operating company was unable to pay its debts. This meant that minimum statutory redundancy would be paid. The 460 workers received scant hours of notice before locks were changed.
Government Ministers have expressed dismay over these developments and have spoken of the "despicable treatment" meted out to employees. Arrangements have been made by the Department of Social Protection to advise affected workers about their welfare entitlements. Representatives of the trade unions involved, Siptu and Mandate, will meet the liquidators appointed by the new owners today but it is thought unlikely that any special arrangements will be made. The retail sector suffered badly in the recession. As recovery took hold, however, foreign "vulture funds" engaged in bargain hunting and Gordon Brothers is believed to have secured a 100 per cent profit on its investment. In recent weeks, there had been talk of developing the site as a hotel or for mixed office and retail use. The intention of its new owners, now that the store has closed, remains unclear.
Keeping Clerys open and retaining its workforce might not have been a viable option. A managed wind-down was a possibility. But the crude manner in which the closure was forced through, displaying an absence of social concern, reflects badly on those involved. An exploitative tendency exists in Irish life. It was expressed in an 18th century song, An Spailpín Fánach, that spoke of the drudgery and hardship forced on casual labourers by comfortable farmers. That abusive, dominant approach has not gone away. The negative reputation of foreign "vulture funds" should not obscure the fact that an Irish company was centrally involved in this exercise.