Call for budget measures amid ‘retail crisis’

Call for budget measures amid ‘retail crisis’

Eamon Quinn

The Mandate Trade Union, which represents 37,00 staff, said it has joined with shop owners to warn the Government about a looming jobs crisis as online sales lead to the closure of brick-and-mortar stores.

Assistant secretary Gerry Light said Finance Minister Paschal Donohoe should look in his budget in October to remove the “unfair” burdens facing stores which are not shared by online giants such as Amazon, which services Irish orders from over a dozen warehouses in the UK.

The online giant avoids paying the commercial rents and rates of their brick-and-mortar competitors, he said.

The call comes amid evidence that Irish retail jobs are increasingly threatened, as UK retailers close stores in the Republic and the North.

Department store House of Fraser at the Dundrum Shopping Centre last week entered administration, but stayed open, after its equity fund owner sold the UK and Irish chain to Newcastle United-owner Mike Ashley’s British and Irish clothing chain, Sports Direct for €110m.

Concerns about the 200 staff who work directly in the store, and possibly as many as 200 more staff who work for in-store concessionaires, have persisted.

It has emerged that fashion retailer Heatons, which Mr Ashley bought two years ago, plans to shut its Monaghan Town store and one other of the 54 stores it owns in the Republic and the North.

And Homebase told staff earlier this week it may close three stores in Ireland, at Limerick and Dublin’s Fonthill and Naas Road.

On Dundrum, Mr Light said the union was “disappointed” in having had no response to correspondence sent to both House of Fraser and to administrator EY seeking a meeting over the store’s future.

He said the impression given to staff last week was that Mr Ashley planned to include Dundrum, but no one has confirmed that he will do so. “Somebody needs to take responsibility for the situation,” he said.

The House of Fraser takeover illustrated that brick-and-mortar stores “pay rent and rates while online companies do not face the same costs”, said Mr Light.

Noting that many of the Irish chains are owned or run out of the UK, he said there was “no doubt” jobs in the Irish retail industry faced a huge threat, as the crisis experienced in Britain spreads across the Irish Sea.

The “massive” effects of Brexit as the UK chains look at their trucking and supply chains from Britain into Ireland would also be felt in the coming months.

The Government should equalise the tax regime facing goods bought online “most of which are made outside of the country by Amazon” whose huge UK warehouses do not pay the same taxes to the Irish Government, he said.

“Some of the challenges we have are under our control and could be dealt with as early as in this budget in October,” Mr Light said. Heatons gave Mandate commitments it will discuss its plan to protect jobs.

Mr Light said Heatons has also rebranded a number of stores under the Sports Direct name and that in those cases there have been no job losses or pay cuts.

Yesterday, shares in Kingfisher fell 4.5% even as the DIY retailer said it was pleased with the turnaround of its B&Q and Screwfix stores but was affected by problems at its French operations.

Additional reporting by Patrick Tierney

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