Debenhams closes on Roches deal

A BRITISH department store group is close to finalising the takeover of Roches Stores in a deal worth just under €30 million to the Cork-based retailer.

According to a report yesterday, the Roches family, who own the 105-year-old company, will get €29m from the sale, which is expected to be announced this week. The muted price is just a tenth of the company’s annual sales, and includes only nine of the 11 Roches outlets.

The deal is much less than the €150m value put on the deal when it emerged last month.

Roches will remain the owner of the stores and lease them on to Debenhams. Given the property boom, the Roche family could raise hundreds of millions of euro from the outright sale of the stores. Its flagship outlet on Dublin’s Henry Street is considered one of the best retail properties in Ireland.

Attempts to contact Roches Stores and Debenhams for comment yesterday were unsuccessful.

It is expected that once a sale is concluded, Debenhams will rebrand the nine stores over the next year as part of its expansion plans in Ireland. Debenhams have just three shops here — in Dublin, Cork and the Whitewater shopping centre in Naas, Co Kildare. Debenhams will take over all but the Nutgrove outlet in Dublin and the Wilton store in Cork, which is expected to be sold to Marks & Spencer.

It is not known at this stage what the impact of the sale will be for concession holders in several Roches Stores. The Henry Street outlet is home to a Zara store and also has concessions for the likes of Pull & Bear, G Star and Pepe.

Debenhams’ designers include the likes of John Rocha, Jeff Banks and Jasper Conran.

Ireland is a profitable base for Debenhams. In the 12 months to September 3, 2005, the last date for which financial details are available, show pre-tax profits of €3.5m direct sales of €28.5m, both up on the previous year.

The additional of Roches’ €290m in annual sales will have only a minor impact on Debenhams overall business. In the year to September 3, 2005, the company had sales of just over €3 billion and pre-tax profits of €350m. The British company relisted on the London Stock Market earlier this year and is aiming to double its 125 stores in the next few years.

No financial accounts for Roches Stores are available because of its unlimited corporate status. It is known that Roches has been loss-making for a number of years. It offloaded its food business some years ago.

The only details to be concluded now are the redundancy terms for Roches Stores 90 head office staff and the conditions for the employees remaining with the business.