Signs of decline in capital shopping mecca

ONCE the rival of London’s Oxford Street and New York’s Fifth Avenue in rental prices, Dublin’s Grafton street is now displaying the affects of the celtic recession — To Let and For Sale signs struggling with “massive discount” posters for shoppers’ attention.

The cold wind of the Icelandic banking collapse is just one of the factors pushing the street from up-market in the direction of bargain basement. The clear shift is evident in one shop-front selling cheap tourist merchandise under a garnish banner declaring “Never mind the recession, see our prices”.

In recent weeks, nearly 10% of the street’s retailers have vacated their premises. Mainly outposts of British multiples, they have fallen victim to the three-pronged assault of sterling devaluation, the Icelandic banking collapse and exorbitant rents.

Dublin Business Association chief executive Tom Coffey said the Grafton Street area has been uniquely hit by the downturn, with the demise of retailers happening “very quickly”.

“Due to Grafton Street’s position as a primary shopping area, it has been hit harder than secondary streets. On these secondary shopping streets most premises remained Irish-owned, whereas on Grafton street only 50% of businesses own the premises they trade in. The others are mainly owned by pension funds who have given tenants contracts stipulating that rental prices could only be reviewed upwards,” he said.

Seven of the street’s approximately 70 retailers have closed in recent weeks, with numerous To Let signs also sprouting from office premises on buildings’ upper floors.

Mr Coffey added: “Nearly all the businesses that have gone were British multiples. Many were funded by Icelandic banks... The next problem was that sterling devalued by 30% making trading more expensive for British companies. With rental prices high some just decided to pull out.”

Among the store fronts now vacant are the former premises of international clothing chains, Warehouse, and Jack & Jones.

As late as last December Grafton Street had continued to rank alongside the world’s premier shopping areas. According to estate agents Lisney, retailers then were paying rents averaging at €5,621 a sq metre per annum, a rise of 5.3% on 2007.

These rents are no longer realistic but Dublin Chamber of Commerce spokesman Patrick King said rates must be revised.

“At the end of last year the council raised rates by 3.3%, that’s when inflation was expected to run at 4%. Now we’re looking at more stagnation, so this charge, which only accounts for premises’ size rather than profits, must be revisited,” he said.

However, Mr Coffey says the overriding factor is fewer shoppers. “This will not be fixed by Christmas, whether it’s a recession or a depression its will take 10 to 20 years to right. People just aren’t spending. They’re scared most by unemployment. Everything must be done to keep people in jobs.”