There was a time when Irish teenagers made it their business to be the experts in the business of retailing.
Sixteen-year-olds coveting the highest-paying Saturday jobs competed for intelligence over which of the big shops were taking on Christmas staff. Back then it was the most successful and profitable chains that paid and treated even temporary and part-time workers the best.
It was a golden age for the city centres before the rise of out-of-town malls when stores were shops and not brands, and click-and-collect shopping was still waiting for the internet to come along.
The slow relentless decline of the bricks-and-mortar store has long been studied in the US and in Britain. Yet, there was something startling in the collapse last week of two big chains that have laid claim to large swathes of Irish town centres since our teenage days.
The Arcadia Group was put together down the years to include a dizzying range of the well-known fashion sellers Topshop, Topman, Miss Selfridge, Dorothy Perkins, as well as Burton, that survivor of a bygone age.
With Arcadia seeking court protection in Ireland and Britain, trade union and employer experts say they fear for many of the 1,000 people employed in its shops from Cork to Cookstown if, as is likely, all the Arcadia outlets and concessionaire outlets cannot be saved.
Then on Tuesday, Debenhams, another struggling retailer, said it would close down all its remaining 124 outlets in Britain and the North and eventually shut for good its online store, which together employ 12,000 people. Under controversial circumstances, the retailer had already shut in the Republic in April when the first lockdown was only a few weeks old and continued to sell its products online into the country from England.
The sudden closure of Debenhams and the struggles facing stricken Arcadia, along with a host of jobs in other smaller and much lower profile retailers, can no longer be dismissed as an industry losing a few of its most vulnerable players at a time of maximum stress.
People working for the two big British retailing beasts have already had to endure the dealings of their once colourful owners. Starved of any revenues when shut during the first of the sudden lockdowns of the Covid-19 crisis, Arcadia and Debenhams were long burdened with too much debt and unable to invest and thrive online.
The last hours of Debenhams also sadly had its moments of farce.
Before attracting the derision of politicians, Arcadia owner, the knighted Monaco-based Philip Green, and Mike Ashley were once fawningly hailed in Britain as potential saviours of a beleaguered retail industry.
Mr Ashley’s Frasers Group, best known for its Sports Direct chain, offered an eleventh-hour loans-lifeline to Debenhams, which was dismissed by one analyst as impractical and something of a stunt. The empire-building tussles of two billionaire English retail owners for long could be ignored as having little influence on Irish Main Street or shopping malls over here.
Analysts had long pointed out that the decline of in-store retailing and the shuttering of the British High Street was not as stark on this side of the Irish Sea. But the collapse of Arcadia and Debenhams will, unfortunately, matter a great deal here.
First, unions and analysts have warned of the possibility of a large jobs shakeout in late winter when the shops have sold off their Christmas stocks. The Covid pandemic already has had awful consequences for retail workers and it is taking the threat of big job losses in high profile groups to get the attention their plight deserves. The Christmas weeks can account for up to 40% of annual trade that helps pay the rents over the long winter and the lean early spring months.
A post-Christmas shake out in retail has happened in each and every crisis we have gone through in the past and although the nature of this Covid crisis has been somewhat uneven in the type of business most exposed to the lockdowns, struggling city centre retailers are, if anything, in their worst ever shape to be able to rebound to financial health.
The onset of the last economic crisis started in 2008 and by the bleak Christmas of 2010 retail jobs were in the firing line. Economists talk of fears of economic crises that lead to what they call permanent scarring. The story of the permanent scarring suffered by households working in retail from the last crisis was told in the live register figures that kept count of the unemployed previously working in the industry who didn't get a job for many years.
A large number of retail workers have gone back to work this week as the level 5 restrictions are lifted for good. They are part of the 30,000 cohort the Government parties hailed just over a week ago that were about to get their jobs back by the weekend, as if the Government was claiming that hundreds of multinationals all at once were creating thousands of jobs.
There is political wishful thinking and the natural inclination of some business groups to want to believe they can somehow talk up consumer confidence. (Talking up the economy didn’t work in 2018 and it won’t work in this crisis for sectors which were struggling well before March 2020.) What could the toll of the job losses for retail amount to?
There is one reliable measure: Almost 57,000 wholesale and retail workers were on the pandemic unemployment, or PUP, payments just ahead of the reopening of the fashion and general shops. That is a large chunk of the total of 307,500 people working in all parts of wholesale and retail. The numbers don’t take account of the many others in transport and distribution who will suffer if there are more casualties in city centre retailing. Leading economist Jim Power said the fears for retail jobs in the first few months of next year are real when the Christmas rush is over.
The Mandate trade union warns most about the fashion retailers and drapery stores, which have faced the brunt of the Covid lockdowns. In this most unusual of crises, there are exceptions. Supermarkets and their supply chains never closed in the Covid crisis and support many retail jobs. Five supermarkets account for 90% of the €12bn in annual sales in the Republic and they are booming. The big five grocers look set to add a further 10% in volume sales this year, CSO figures suggest.
There are some positive signs for fashion retailers. The shares of ABF, the British owner of Irish-run Penneys-Primark, and those of Inditex have clawed back part of their hefty losses suffered since March. Inditex out of Coruna in Spain runs Zara, Massimo Dutti, and other clothing chains.
But there are good reasons to worry that the woes of the High Street in Britain are pulling up on the Irish Main Street. The landscape of retailing in both countries are very much the same. Our newest shopping centres have been put together by the same pension and insurance landlords and the same property firms own big parts of prominent retailing in Britain and Ireland.
The shopping malls follow a pattern too: The British, Irish, or German-owned supermarket retailer plays anchor tenant to attract a regular flow of shoppers into centres and the levels of shop rents paid by other retailers are determined in terms of the volume of this passing footfall. But the same events that led to smaller shopping centres falling out of fashion and their sale in Britain to US hedge funds are working through here too.
The handful of analysts who follow retail in this country also believe that the Covid problems will catch up with the industry. Colm Lauder, head of real estate at Goodbody, said though Irish retailing has been much more resilient than the UK, the same challenges as long faced by retailers and landlords in the UK are mounting here too. Citing up to 20 retail leases in the Grafton Street district that have no long term tenants, he said leading shopping streets in Cork and other cities and towns face similar long-term challenges.
Mr Lauder said that some owners of shopping centres such as Dundrum, which at 140,000sq metres is Ireland's largest, have been helped during the Covid lockdowns because essential traders remained open. Blanchardstown in Dublin, owned by private equity firm Blackstone but which looks set to be acquired by Goldman Sachs, is the second-largest centre in Ireland, while Mahon Point is Munster's largest.
Shares in retail British landlord Hammerson, which owns half of Dundrum and also owns Brent Cross in London and Birmingham's Bullring, have risen in the past week despite the news of the latest big retail casualties. Its shares nonetheless have slid by over 80% from a year ago, as the Covid emergency added to longer-term problems for its British retailing tenants. Hammerson also owns half of the Swords Pavilions and the Ilac Centre in Dublin city centre, and controls the nearby 1916 battlefield site, and has a significant minority stake in the Kildare Village, and at the start of the year completed the sale of the Abbey Retail Park in Belfast.
Mr Lauder said it will be very challenging to find new tenants for the shuttered Debenhams stores, at a time when other retailers may be looking for an exit from well-known Irish shopping streets. Business group Ibec is anticipating more disputes between commercial landlords and their tenants over rents and leases in this crisis. Its director of policy, Fegal O’Brien said it’s urging the Government to bolster what is currently a voluntary code and look at the way other countries, including Sweden, provide incentives to landlords and retailers to keep retail businesses afloat.
The potential loss altogether of the big Arcadia and Debenhams stores will be sorely felt across Irish city centres. And a lot more than a long legacy of teenage workers' Saturday jobs is at stake.