WHAT a roll call: Debenhams, Laura Ashley, Oasis, Warehouse, Easons, Argos.
The arrival of any of these retailers to any city’s high street would be newsworthy.
But when the bunch of them effectively move from the one street in quick, domino-like succession, it’s the equivalent of a retail contagion or pandemic.
So it is for Cork City’s St Patrick Street, its premier retail boulevard for 150 years: the only equivalent to what’s happened this once-premium street was the burning of Cork in 1920, by British Auxiliaries in the War of Independence. That wiped out 40 shop and premises.
Then, the wide, curving city street got rebuilt, thankfully. Now, a century later, the Covid-19 coronavirus crisis comes on top of an already struggling retail sector, and among the biggest casualties is the Debenhams store, in the former and iconic Roches Stores building.
It’s the largest single retail shop in Munster, and one of the largest in the country, too, with 150,000 sq ft of space over two levels, slap-bang in the heart of the city.
If some entities were previously said to be ‘too big to fail,’ with recession now official, and retail in turmoil, might this gracious building simply be ‘too big to fill?’
Its big heart has been ripped open, it lies exposed even while locked up, and among the casualty count are 700 Cork Debenhams jobs, shared by staff and concession operators, here in the city’s core and at Mahon Point where Debenhmans have 70,000 sq ftof retail.
The St Patrick’s Street store dates to 1922, having been rebuilt post-burning, and so is bookended over a century by two devastating events, one local, one global.
It’s still owned by the Roche family, as an investment, and has been let under a revised rent of €3.25m to Debenhams, on a 25-year lease from 2006: that’s since Debenhams took over nine Roches Stores outlets that year, for over €29m, with many staff transferring.
The Roche family, who were previously reported to have property assets of €500m in Ireland and Britain, had very quietly put the building (excluding the main shopping mall, SuperValu section, and multi-storey carpark) up for sale two years ago with Colliers, reported here with an unconfirmed price of €70-€75m cited, for a 5% return.
The loss of a tenant like Debenhams may well have put the tin hat on the investment value of the copper-domed building.
After the market failed to bite on the sale, and as Debenhams’ wobbles and woes continued in the UK and Ireland, under mounting debts, it’s understood Richard Roche and a team have considered other routes, such as subdividing the front section, with PRS apartments and a hotel in other parts.
Innovative thoughts will be needed too, not just by Roches, but by Cork City managers and planners.
Could we lead the way with engaged community uses? Move the City Library? Create social spaces, art/entertainment, theatre or cinema? Or community services, for when we can again physically re-engage with one another, post Covid-19?
It’s hard to get away from the retail mentality and model, broken and all as it is, though right now the sector is firefighting on many fronts, with shops closed and given supply chain challenges.
There’s one strong retailer for whom the building could be a perfect fit: Penneys, who already occupy the former Roches Store unit in Wilton Shopping Centre.
Penneys might cast an eye over Debenhams in Mahon Point, or on Limerick’s O’Connell Street, but on Cork’s St Patrick Street, it may well be too committed to its existing footprint.
It’s between Patrick Street and Oliver Plunkett Street, just about the best pitch in town, sharing close-run challenges from Brown Thomas and ‘Roches Stores.’
At this stage, Penneys has possibly spent over €20m on site assembly and now pretty much owns all of its block, with a well-advanced masterplan for enlargement and side stores (rather like concessionaires) under its overall wing.
Penneys owns its own building, too, plus its recent bolt-ons, so how might it feel about moving metres up the street, only to pay rent?
But, might it buy ‘Roches’ and sell its own properties, which would be easier to fill, being more bite-sized?
A broken-up Roches Stores might have suited a Sports Direct/House of Fraser model (their own current trading woes, post-takeover, notwithstanding), but right now Sports Direct is due to take over the two-storey Easons building on Patrick Street, with Easons to relocate.
IN any case, department stores “are unlikely to be part of the future retail picture. It is likely their owners are going to need to look at a number of different uses to fill the void,” says Peter O’Flynn, MD of Cushman & Wakefield, Cork.
Aptly describing Debenhams’ 150,000 sq ft as “big shoes to fill,” C&W’s Mr O’Flynn points to a shift, of necessity of late, with reduced car travel and commutes, and suggests “we have to move away from the traditional High Street model and work toward liveable urban cities, where the work/life balance is designed for people choosing to live in our cities.”
Property experts agree that deep sectoral changes will follow, after the Covid-19 crisis.
Savills’ Cork director, Peter O’Meara, says the current blitz of closures and retail shocks will mean a recalibration of the sector.
This will include impacts on rents, leases with more flexible occupier terms, low base rents with top-up of turnover percentages such as are being sought by the likes of Zara, H&M, Next and others. There will be more dialogue between landlords and tenants, with both parties under business and debt pressures.
Looking further down the line, while there will be casualties and challenges aplenty, “there will also be opportunities for others,” Mr O’Meara says.
Opportunities may alleviate some of the Debenhams devastating news and employment blow.
Margaret Kelleher, who heads up Lisney Cork, says there’s a very good chance that some of the concessionaire stores under the Debenhams umbrella may move out to their own individual premises.
These specialist and skilled retailers (including cosmetic names), who already have a customer base in Cork, may look at smaller units on St Patrick Street, or on Oliver Plunkett Street and its off-shoots, and open under their own banners, with their own front doors, if willing landlords give suitable terms.
Names that may emerge to trade with their own brand over their own doors could include John Rocha, Ted Baker, Wallis, Urban Decay, Keils, Monterey, Nine West. Or Clarke’s, the shoe shop company, who also are already on Patrick Street: might they match their two city presences and pair up in a bigger store?
Not all fashion retail suits online, says Lisney’s Ms Kelleher, instancing ‘occasion wear’ as one that demands a physical store.
And, on the wider front, this may be a chance for the city to react, she says, and to tailor-make St Patrick’s Street for a wider range of occupiers and uses post-crisis, to add further residential, cultural, and community uses, further improve the public realm, or even to provide a few hours of free parking for visitors who have shop receipts. Ah, shop receipts…remember them?
Retail may blend online and shops
Online retail’s boom during the Covid-19 lockdown and new social distancing norms won’t necessarily spell the end of actual, physical shops, an Irish retail property expert has signalled.
In fact, pure online retailers may soon augment their sales model with shops, suggests Eoin Feeney, who’s head of retail and deputy MD at BNPParibas Real Estate in Dublin.
Mr FeeneyHe argues that for retailers, “recent events have no doubt demonstrated the importance of the ‘omni’ or ‘multi’ channel model, where online and bricks-and-mortar seamlessly interact and where the whole is great than the sum of its parts”.
“We will not be surprised to see previously pure online retailers taking up a portion of newly available retail space freed up as an inevitable consequence of the unprecedented ongoing global retail disruption,” he states, accepting that “the global pandemic of Covid-19 has delivered shockwaves to the global retail market, forcing almost all retailers to close up shop and leading to widespread job losses — although many of these are expected to be only temporary.”
While grocery thrives, others are in self-preservation mode, and now the priority in the prime retail sector is for a case-by-case solution for parties and “communication and close collaboration between landlords and tenants in order for the retail market to prosper,” says Mr Feeney.
“Both need one another and “either way, the pain for both parties will ultimately have to be shared.”
Ireland is in a better position vis a vis supply/demand than the UK or US, he points out, adding “there is a strong argument that Covid-19 is merely hastening the demise of retail operators that would likely have failed further down the line irrespective of the virus.”
While Debenhams is the highest-profile retail casualty, BNP Paribas “expect further insolvencies, and other occupiers will streamline their store network by re-opening fewer stores once restrictions are lifted, especially where there is a break or lease expiry within 12 months. This will leave landlords with rental voids and rates/service charge shortfalls”.
While online shopping has been in the ascendant and has been normalised among older generations, “ social distancing measures are relaxed, a combination of pent-up demand and low inflation should support a rebound in spending over the second half of 2020, although this depends upon the impacts of the virus on unemployment and wider economy.
“We do expect an initial spurt of ‘revenge spending’ by consumers as the real physical experience of shopping is permissible once again,” Mr Feeney predicts, saying “the notion of an e-commerce boom is overplayed, in our view ... if anything, Covid-19 has reinforced for the general public the importance and necessity of the bricks-and-mortar retail model.”
St Patrick’s Street has lost its family connections, says long-time trader
John O’Connell’s longevity as a trader in guns and fishing tackle at his Patrick’s St premises makes him the ideal candidate to comment on our main street’s changing face.
The 91-year-old chartered accountant has been proprietor of TW Murray and Co Ltd since the 1950s, when he took over from his father, George, who had run it since the ‘20s.
Prior to that, it had been in the ownership of the O’Keefe family since 1902, and before that TW Murray, who took up the mantle from a chap called Richardson, the founder of the business in 1828.
It is John’s view that the loss of family businesses on our main street has led to a retail environment dominated by absentee landlords, large franchises that come and go, pop-up shops and a reduced offering to consumers in terms of both specialist shops and the absence of that “personal touch” that usually goes hand-in-glove with family-run businesses.
“Back in the day, every business at one stage or another had family connections and you don’t see that any more, “ he says.
“If you go back along, the Moderne next door to me was run by the Dowling family; you had Roches Stores and the Roche family there running that and you had Lester’s Chemist, a huge chemist. (later Quills clothes shop, now vacant).
“Mr Lester would be man people would go to for his knowledge of medical supplies and all these things.
“You had Maddens grocers up on Bridge St and down the other end of Patrick St, at Daunt Square, you had Woodford Bourne wine merchants.
“Closer to me, we had Brown Thompson seed merchants and Guinness House.
“Most of the businesses at that stage had a family connection, I’d say they were set up by families actually, whereas today, a lot of them are owned by foreigners or outside combines, that would be the main change that I see.
“There’s still a couple of family businesses around like Tom Murphy (gentlemen’s clothing), but you don’t get too many specialist shops. We get a lot of foreigners into TW Murray and they always say it’s extraordinary to find a shooting and fishing shop on the high street. They say you wouldn’t find it anywhere in Europe.”
What does he think of the proliferation of sports shops on Patrick St?
“You can’t do anything about that, it’s commercial, I mean it goes to the highest bidder.
“But I do think people like Finns (Corner) are a great loss to the place because they have a connection to the place and to Cork that outsiders don’t have and one hates to see a family concern going (Finns closed recently).
“A lot of businesses like ours have a personal connection, people like to know the people they are coming into and we regard them more as friends than customers honestly.”
John says the importance of Patrick St to the life of the city cannot be over-emphasised. “It’s essential to have a main street in every city and that usually is the focal point of most cities. And I think most people would regard it as that.
“I also think if the businesses were more family-orientated, they would have a greater interest in the place. Some of the owners, when they are not part of the environment themselves, do not take the same interest in it as they would if they were part of it.
“They would not have the heart of the place in their thinking and in their actions.
“I think there tends to be a hands-off situation when people are not actually living in the environment themselves, absentee owners, absentee landlords.
“If their businesses here in Cork are part of a wider group (eg Debenhams), their thinking and actions are around the whole group and not any one particular section.
And I think we suffer as a result of that.”
Is his own shop likely to remain in the family?
“My son George is here now and will be there after me. You have to hope for these things.”