Arnotts staff await outline of plan

STAFF at Arnotts are hoping to be told this week what plans Anglo Irish Bank and Ulster Bank have for the store’s future, after Brussels gave the green light for the lenders to take over the debt-ridden retailer.

The European Commission said the proposed move by state-owned Anglo and Ulster Bank would not significantly block competition from rival retailers.

The rubber-stamping of the takeover by the commission’s competition section now paves the way for Arnotts to organise its debts and overhaul its board.

In a statement, the commission said: “The commission’s examination of the proposed transaction showed that it would not significantly impede effective competition in the European Economic Area or any substantial part of it.”

Brussels said that both banks intended to restructure Arnotts’ existing debt in return for joint control over the iconic Henry Street department store and its sister Dublin outlets.

Reacting to the decision, Mandate, which represents 900 workers at Arnotts, said staff were hoping to hear from management this week. Assistant general secretary Linda Tamham added: “We will wait until the meeting with the company. A new board will probably be set up. We want somebody on it who will have the staff’s interests.”

The future of Arnotts’ management remains uncertain, with speculation owner Richard Nesbitt wants to remain on as chairman.

At the heart of the takeover is the fact that both banks want to recoup €300 million, borrowed to fund a costly nearby retail development.

Arnotts refused to comment yesterday, but Anglo said that a board meeting would be held shortly. It is expected Mark Schwartz, head of Paladin Capital Group, who are overseeing changes for the banks at Arnotts, will be appointed to oversee the business.

Mr Schwartz and the group worked closely with the banks and company for the last five months. He said: “While there has been understandable concern in recent days about the future of Arnotts, I wish to reassure our staff, suppliers and customers that this great institution will continue to play a leading role in the Irish retail market.

“Arnotts is a tremendous business and we need to continue to enhance the shopping experience for our longstanding customers. Our goal is to focus on the future, work closely with our strong staff and our suppliers, and create the conditions which will enable Arnotts to thrive for many years to come.”