The ladies fashion retailer Warehouse is to pull out of Dublin's Grafton Street area. News that the company is planning to assign its lease of a high-profile shop in the Gaiety Centre on South King Street comes a few weeks after a sister company Karen Millen closed down on Grafton Street.
Last November, Warehouse along with two sister companies, Karen Millen and Coast, were given High Court protection to allow them try to trade out of financial difficulties.
A US investment company, Lone Star, which acquired the Gaiety Centre as part of the Redwood Project, has agreed a significant reduction in its rental terms which will allow Warehouse to pass on its lease to another trader at little more than half the original rent.
Darren Peavoy of Bannon is to launch a marketing campaign to find a replacement tenant for Warehouse, which occupies 159sq m (1,711sq ft) on the ground floor and 223sq m (2,400sq ft) overhead. Warehouse's original rent of €600,000 is to be reduced to €350,000 and, despite the ongoing recovery in high street retailing, there will be no question of looking for key money.
Survival plan
Declan McDonald of PwC has been appointed by the High Court to prepare a survival plan for Warehouse, Karen Millen and Coast.The court was told that the trading position of the companies has improved since last year. However, the receiver is seeking a buyer for some of the stores and is also renegotiating a number of rents.
While the Warehouse rent is to be cut by 42 per cent, the rents being paid by the two other anchor tenants in the Gaiety Centre, Zara and H&M, did not change as a result of the slump in consumer spending. Both companies are understood to be trading exceptionally well on South King Street, helped in part by their close proximity to the large car park in the adjoining St Stephen' s Green centre.
Although H&M recently opened a stand-alone shop in the former National Irish Bank at College Green, one insider says it has not affected trade at the Gaiety Centre.
Zara has been paying a rent of €915,000 as well as a top-up rent of 9 per cent of turnover. The overall rent is apparently capped at €1,383,000. In the case of H&M, the base rent was originally set at €800,000 with a turnover related top of up to €690,343.Unlike these two tenants, Warehouse never agreed to a top-up rent related to the turnover.
Mobile phone shops
While the Karen Millen store on Grafton Street is not due to be let until the internal floor arrangements have been changed, city planners will be relieved to see a reduction in the number of mobile phone shops on the street as result of the merger of 02 and 3.
Two phone shop leases are currently for sale on the street and if different types of traders are found for them, the planners will be taking steps to ensure that they are never again used for phone sales.
