Roches orders buyers to hold fire as takeover likely

ROCHES STORES has instructed the 100 buyers in the company to stop ordering goods, due to the impending deal with British retail giant Debenhams.

It is understood the instruction was issued in the past few days and that all of the buyers’ jobs will be lost if the takeover goes ahead.

Roches Stores has refused to comment and a Debenhams spokesman said “the group never comments until it has completed a deal”.

However, Debenhams analysts in Britain said the Roches deal, if it goes ahead, would fit the British group’s strategic plan of increasing shop floor space.

Debenhams recently announced its intention to double its number of stores from 120 to 240 in Britain and Ireland. It currently only has three stores in Ireland, with the rest located in mainland Britain.

Details of the Debenhams plan are beginning to harden and it is understood at this stage that it will take control of nine of the 11 Irish stores owned by Roches.

The Cork-based retailer will retain ownership of the properties in a deal that could be worth €150m to the Roche family.

It is expected the Wilton Store in Cork will be sold to Marks & Spencer and that its Nutgrove shop in Rathfarnham will also be sold.

Its head office in Sandyford, Co Dublin, is due to close with the loss of 100 jobs, most of them the buyers employed by the group and some senior executives.

Chief executive Stephen Barry is to retire on October, while Richard Pierce, former finance director, has been taken on board by Debenhams to finalise the deal with his former employer.

Roches has been planning its exit from the retail sector for some time. It has struggled to come to terms with the more aggressive retail Irish market, which has become highly competitive, due to competition from overseas by such players as Tesco and greater pressure from domestic contenders such as Dunnes Stores and Musgraves and the symbol groups.

Last year Roches generated sales of €300m but was unable to end its loss-running streak of recent years, despite heavy investment, including a €75m revamp of its flagship Henry Street store in Dublin.

The retail value of the group’s properties is close to €300m and the Roche family is keen at this stage to maximise the rental value of the shops by finalising a deal with Debenhams.

Negotiations have been going on for some time and terms are expected to be agreed within three months.