FEARS of a bargain basement sale of department store Arnotts have left workers at the iconic retailer demanding answers from its new bank owners.
State-owned Anglo Irish Bank and Ulster Bank are set to take over the debt-ridden department store but there is speculation that at least one major retailer is lining up to purchase the Dublin business.
The banks had backed the store’s expansion until it was put on hold.
Arnotts confirmed yesterday it was working with both banks to salvage its business but retailing sources have suggested competing shopping chain Brown Thomas has set its sights on the Henry Street store.
Both banks engaged US consultants earlier this year to look at the store’s future. Former Brown Thomas boss Nigel Blow was hired to oversee the review.
Trade union Mandate, which represents 900 workers at the store, said yesterday it had written to both banks seeking clarification over the takeover by the lenders and an immediate meeting.
General secretary John Douglas added: “It [Arnotts] has that monkey on its back with that debt it got buying property in and around it. What we want to find out from the banks is how they see that debt being satisfied.”
It is believed both banks have appointed directors on Arnotts’ board in recent months.
Arnotts is believed to be facing up to €300 million in debt, following attempts to open a new department in a proposed €750m redevelopment of a five-and-a-half acre area surrounding the store.
The Northern Quarter would have included residential and entertainment elements as well as a shopping area.
Brown Thomas yesterday said it had no comment to make and said “there was no truth to the rumour” that it would take over the store.
Its owner and Canadian billionaire Galen Weston, however, has previously said he expected “lots of opportunity for Brown Thomas on the northside,” that a lot happening was happening on Henry Street and that the high-street store chain would “sit back and see how that plays out”.
Arnotts Holdings, in a statement yesterday, reassured its customers that business would continue as normal. “Arnotts is performing very strongly with trading for the first half of the year ahead of the Irish retail market. Jobs within Arnotts remain secure and Arnotts continues to invest in the future of the store,” it added.
But former Arnotts executive Eddie Shanahan said that the company was not trading profitably compared with previous years.
Arnotts’ new store in the Jervis centre had failed and it was forced to pay €5 million to break the lease.
Mr Shanahan added: “It’s been on the slide for a while. The longer it takes to sort it out, the more damage will be done to the [Arnotts] brand.”
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