Doughnut effect rips Limerick's retail heart out

THE GOOD NEWS for Limerick is that department store Brown Thomas has no plans to pull out of the city centre, despite on-going speculation that it is about to do just that. The bad news is that there seems to be no easing in the pressures – from poor planning decisions and the recession – on the city centre.

“Limerick is a classic example of the ‘doughnut’ effect, with all the development going to the outskirts,” says Mark Allen, a director of Allens, which has recently opened a gift and homeware store in Limerick city centre.

Indeed Limerick has the curious position of being one of the few towns or cities in Ireland where rents are higher outside the city centre than within it, a legacy of decisions to allow developments on the outskirts expand to the detriment of the city centre.

This means that the city centre has become neglected, as various retail parks dotted around the city, as well as the Coonagh Cross shopping centre on the Ennis Road which has been deemed a white elephant by its developer because it has failed to take off, were allowed to be built.

One of the prime beneficiaries of this planning strategy has been the Crescent Shopping Centre, in Dooradoyle, owned by the Kenny family. Not so long ago, this was a typical suburban centre.

Now, after repeated expansions, it hosts a 12-screen cinema and top foreign retail multiples (Zara and HM) which don’t have a presence in the city centre.

Instead, the city is anchored by Brown Thomas, Debenhams and Penneys. As Allen says, these act as the “foundation” of the city centre – but if one was to “pull out, the city centre would suffer very badly”.

However, despite rumours that Brown Thomas is to depart, managing director Stephen Sealey says: “The store is profitable and we have no intention at all of closing it.”

Brown Thomas owns the building which houses its store in Limerick, which puts less pressure on it when it comes to keeping the business afloat.

According to Sealey, BT plans to invest in its beauty hall by laying a new marble floor in April.

But this doesn’t disguise the fact that Limerick is the poorest performer in the Brown Thomas Group. “It is the most difficult of our businesses,” concedes Sealey. While its stores in Dublin, Cork and Galway were in the black last year, the Limerick shop traded down “a couple of percent” he notes.

As yet it’s too early for Allen to compare his new Limerick store with older outlets in Carlow, Kilkenny and Athlone, he “expected to be busier” in Limerick. But he’s looking at the outlet over the long-term.

So how did things come to this? After all, back in 1992, the pedestrianised Cruise’s Street – modelled on Dublin’s Grafton Street – opened to much fanfare. But even at the time there were doubts that the street would take off, with The Irish Times reporting that “it is doubtful if its economic base is strong enough to take another scheme of the scale proposed – especially on a site just across the street from the new shopping centre at Arthur’s Quay”.

For Cruise’s Street, however, Arthur’s Quay was not the problem, but rather the planning decisions that allowed out of town shopping centres and retail parks to flourish at the expense of the city centre.

“There were some very foolish planning decisions,” says Sealey.

Now Cruise’s Street is one of the worst performing retail streets in the country in terms of footfall, which has seen Dorothy Perkins, Next and Benetton all depart the street. And the more shops that leave, the more difficult it becomes for those which remain behind.

This has pushed many outlets, such as Dorothy Perkins and Next, out of the city centre and into shopping centres or retail parks on the outskirts.

While in 2009 the council turned down an application for the Crescent to expand further, the damage has been done.

While the weekly market and rugby matches are a positive to the city, for the city’s traders they can have a negative effect. “People are afraid to come in because it’s too busy,” says Sheila Cusack, who runs Helene Modes on the city’s Roches Street.

Cusack tried the out-of-town shopping, opening a second Helene Modes at the Crescent in 2000 but rent increases quickly priced her out. “When I went in rent was €36,000 a year, but this then went up by 100 per cent, followed by another 100 per cent rise,” she recalls. By 2008, she was being charged €140,000 a year, a level she found unsustainable. So she closed up and kept her shop in town open, but says the city has “gotten too quiet”.

Now the city’s hopes rest on the Opera Centre, on the perimeter of Patrick Street which has been given a last minute reprieve by Limerick City Council. The centre is seen by many as an example of the excess of the boom years, bought at the peak of the boom for €110 million by developers Jerry O’Reilly, Terry Sweeney and David Courtney. The plan was to build another retail outlet on the site of existing shops, anchored by the likes of Marks Spencer.

But once the bubble burst, the Opera Centre was subsumed into Nama. Late last year, it off-loaded the centre to Limerick City Council for just €12.5 million, and it plans to re-locate Limerick City Museum to the site, pending plans for further development. A spokesman for the council said it hoped to re-locate the museum to a site bordering Ellen Street and Patrick Street over the summer.

Whether or not it can succeed with pushing some sort of a retail development into the site remains to be seen. It seems that the only winner in the deal has been Suneil Sharama, who assembled the original site for the centre. The site has become derelict and this is hurting the city.

Furniture retailer Instore, which started out in Limerick in 1988, closed its flagship Ellen Street store before Christmas. While its expansion around the country may have been partly to blame for the demise, at a recent creditors’ meeting owner Oliver Moloney blamed the collapse in retail in the area due to the stagnation of the Opera Centre.

Meanwhile, Sharama is now involved with Liam Carroll’s ill-fated half-built Parkway Valley shopping centre on the Dublin road, which if it goes ahead, will act as a further threat to the city centre. “It contradicts the thinking that there’s too much retail in Limerick,” says Allen.

So what can be done for the city centre? For Sealey, the planning issue “is a done deal now” and he would rather focus on developing the city, which he says “isn’t unduly welcoming”.

“We need to attract interesting stores into the city centre. I’d like nothing better than being surrounded by a thriving city centre,” he says.

Cusack would like to see more publicity for the city as a shopping location, pointing out that independent boutiques along Catherine Street and Roches Street are coming together to promote the area as a “fashion district”. In this regard, it’s not all doom and gloom. “Limerick will survive,” says Sealey.

Indeed, it is continuing to attract new shops into the centre. John Buckley, a director of DTZ Sherry FitzGerald in Limerick, has noticed “a bit of a fight-back” of late, pointing to a couple of recent lettings in the city centre.

And moving to the suburbs can be expensive, as Cusack discovered. Indeed after a few years of volatile trading patterns, since the start of the year sales have been up every week for Helene Modes, which Cusack concedes is “very exciting”.

And as Allen points out, to eat out in Limerick city on a Saturday night you have to book beforehand. “People do flock to the city centre for restaurants,” he notes.

The challenge for Limerick will be to get these people to feel the same about the city centre in the daytime.

We need to attract interesting stores into the city centre. I’d like nothing better than being surrounded by a thriving city centre