Irishman Paul Kelly says he has "long admired" the Dublin department store Arnotts and on Monday he got the opportunity to shape its future when Selfridges Group, the global retail chain he runs for Canadian businessman Galen Weston and his family, acquired the 172-year-old Henry Street business.
Over the past 18 months or so, in partnership with Irish solicitor and property developer Noel Smyth, Selfridges, through a related entity called Whittington Investments, paid €107 million to purchase loans connected with Arnotts and adjoining properties.
These debts were held by Ulster Bank and US investment group Apollo, which had earlier bought out Irish Bank Resolution Corporation’s loans.
Selfridges on Monday acquired the department store for an undisclosed sum, while Smyth’s vehicle, Fitzwilliam Finance Partners, has taken control of the other properties, which were once earmarked for a 130,000sq m (1.4 million sq ft) retail and commercial scheme called Northern Quarter.
Reinvigorate
It was a €750 million scheme devised by Arnotts former owner
Richard Nesbitt
, but bit the dust when the economy crashed in late 2008.
Kelly and Selfridges now want to reinvigorate Arnotts and he is clear the 24,805sq m store will trade under its own name and is not earmarked for a Brown Thomas outlet north of the Liffey.
“Everybody should forget about comparing it to Brown Thomas,” he said, adding that “never for a second” did he consider rebranding the store as Brown Thomas . “It’s Arnotts and we didn’t buy it for anything other than to be the Arnotts business. We’re really proud to have it and we want to make Arnotts great again.”
He said it would take a “few years” for Selfridges to put its own stamp on the business, implement its investment plans and bring in new premium brands.
“It’s going to take a few years just because of the nature of a big building like this . . . everything you touch costs money. So it takes time. We’ve got to have a good long look at everything, but we will be investing in the business,” he said.
Plans
“The positive thing is that through the past number of years when they’ve been starved of [investment] they’ve been able to keep the business alive. We’ve got plans but it’s going to take a few years.”
For a variety of reasons, Selfridges had no interest in Clerys, the O’Connell Street department store veteran that closed earlier this year.
Kelly describes Arnotts as an “iconic” business with a “loyal following”. “It’s got a lot of retail space and we have to put our minds to how best to utilise that space.”
Where are the opportunities?
“A great homewares business, that’s a opportunity. They’ve done a lot of good things over the years and we’d like to work with the team and look at other opportunities. There are things that could be in Arnotts today that are not in Arnotts today.
“Food is one thing. There’s an opportunity there. Beauty, accessories, sportswear. It goes right across the business.”
Arnotts chief executive Ray Hernan will leave the business to pursue other career opportunities, with Donald McDonald to replace him as managing director.
Some cost synergies with Brown Thomas are “possible” but they haven’t yet been considered.
Christmas trade
Mr Kelly said trading at Arnotts in the current financial year had been “positive”, with “strong, single-digit” percentage growth in revenue. But its trading year will ultimately be determined by its performance over the busy Christmas and new year sales period. Mr Kelly is hopeful of a strong showing.
As for the adjoining properties, Mr Kelly said Selfridges would work “along with” Mr Smyth on “some of those things”.
“We’re retailers, we’re shopkeepers, he’s a property man, so it’s a good partnership,” he said.
