Dublin department store Arnotts has been acquired by the Selfridges Group, the high-end UK retailer owned by successful Canadian businessman Galen Weston and his Irish wife Hilary.
Ireland’s largest department store was purchased by Selfridges earlier today for an undisclosed sum from Fitzwilliam Finance Partners, a corporate vehicle set up by Irish lawyer and developer Noel Smyth in 2011 with the intention of acquiring the debts connected with Arnotts and nearby properties on Dublin’s northside.
Arnotts is now part of a portfolio of upmarket department stores owned by the Westons, which incorporates Brown Thomas in Ireland, Selfridges in the UK, Holt Renfrew in Canada and de Bijenkorf in the Netherlands.
This transaction was part of a wider agreement that saw Fitzwilliam Finance Partners and Wittington Canada – the holding company for the Weston Group, Wittington Properties and Selfridges – acquire loans associated with Arnotts and surrounding properties that were once earmarked for the €750 million Northern Quarter commercial development.
They paid €107 million to acquire the loans held by Ulster Bank and Apollo, a US investment group that had previously acquired the borrowings held by Irish Bank Resolution Corporation.
Their purchase of these loans was cleared by the Competition and Consumer Protection Commission in August, clearing the way for Selfridges to take control of Arnotts with Mr Smyth set to develop the properties.
Selfridges said it would engage with Mr Smyth in relation to his plans for the adjacent properties. Mr Smyth recently announced the closure of the Boyers store on North Earl Street, which had been an offshoot of Arnotts.
Arnotts chief executive Ray Hernan will step down as chief executive to “pursue new opportunities” with Selfridges appointing Donald McDonald as managing director of the business.
Irishman Paul Kelly, who is managing director of the Selfridges Group, has been appointed as chairman of ARHL Retail Holdings Ltd, the parent company of Arnotts.
Commenting on the acquisition, Mr Weston, who is chairman of Selfridges, said: “Our family has been a significant investor in Irish retailing and the wider economy since we acquired Brown Thomas in 1971.”
Mr Kelly said Selfridges was “delighted” to be taking over the management of Arnotts. “Our priority will be to build on the legacy of this great Irish brand and we will look to enhance the customer experience while cherishing Arnotts unique heritage, which has been an essential part of Dublin’s retail landscape for over 170 years,” he said.
Management and staff were informed of the sale earlier today at a series of presentations in the store.
Founded in 1843, Arnotts occupies a prime location on Henry Street, one of the busiest shopping districts in central Dublin.
Its offering comprises womenswear, jewellery, menswear, homeware, beauty, childrenswear and accessories, and the store also has a number of cafés and restaurants within its 267,000 sq ft footprint. In addition, Arnotts has a 350-space car park and an online trading platform.
Selfridges said it was “committed” to investing in establishing Arnotts as the leading department store in Ireland by “enhancing the shopping experience for its customers, upgrading the store environment and introducing new premium brands”.
Arnotts’ accounts for the year to the end of January 2014 show that it had bank debts of €383 million. Some €160 million of this related to the privatisation of the company in 2003 with the balance connected with the purchase of adjoining properties for the Norther Quarter development, which was to have comprised 1.4 million sq feet of retail and commercial space.
This ambitious plan was devised by Arnotts’ previous owner Richard Nesbitt but was scuppered by the Irish banking and property crash in late 2008.