Arnotts thinks inside the rink; ICA results show domestic stimulus needed; Aer Lingus back in favour in west
IDA figures show it can do only so much
THE SCALE of the challenge facing Ireland was illustrated this week by the IDA’s end of year statement.
IDA-supported companies generated a net 1,352 new jobs in 2010.
These new jobs are to be welcomed of course but they will only make a small dent in our unemployment numbers – 440.000 people were signing on in December.
This was the best result in four years for the IDA. And it came in a year when exports were flying – growing by 6 per cent, according to figures this week from the Irish Exporters Association.
Exports is probably the only sector operating at full tilt.
While increased foreign direct investment will be an important component to our economic recovery, there’s only so much the IDA can do, in spite of what the Government might tell us.
Stimulating the domestic services economy will be needed to lower our jobless total and returning the economy to growth.
Already this year, high-profile service providers like Celtic Bookmakers, HMV, Superquinn and Toni Guy have announced plans to lay off staff. That’s to say nothing of the banks.
Whenever the election campaign starts, it will be interesting to hear Fine Gael and Labour’s plans to find a solution to this problem.
Icy wind does Arnotts good as it gets skates on
WITH JOB losses once again starting to flow in Ireland and more snow forecast to hit the State next week, we could all do with a bit of a laugh right now.
That’s just what Arnotts’s recently appointed chief executive Nigel Blow, who spent 14 years with Harrods in London, wants to give us at the retailer’s Henry Street department store, where a number of changes are being introduced to return the company to the black.
”We’ve the biggest store in the country. In a way, dare I say it, we can have more fun than Brown Thomas [where Blow worked before Arnotts]. Retail isn’t all about shopping . . . it’s about the experience too for customers. Arnotts trades from 500,000 square feet of space.
“So it’s about thinking outside the box and here we can do that more effectively than in a smaller store like Brown Thomas [on Grafton Street].”
Blow’s first attempt to generate a bit of fun at Arnotts was to open an ice rink on the rooftop car park in December.
“It was something we could do for a bit of fun for Christmas and we’ve had hugely positive feedback to that,” he told me this week. Blow said 30,000 people have skated at Arnotts so far.
“We’re going to keep it open for another few weeks because the demand is so strong.”
Arnotts wasn’t the only retailer skating on thin ice over the festive season – Dundrum also opened a rink for customers as a diversion for customers.
Did Blow get his skates on? “Eh no,” he said. He might be sure-footed in business but it seems the English executive wasn’t prepared to risk taking a tumble on the ice.
Plenty of comings and goings at Shannon airport
IT’S AMAZING the difference a few years can make. Roll back to August 2007 and Aer Lingus’s decision to pull its London-Heathrow route.
The then Aer Lingus chief executive Dermot Mannion was public enemy number one west of the Shannon for cutting off the region’s link to Heathrow and the onward connections it offers.
Ryanair’s Michael O’Leary rode in as the white knight offering to run more flights from Shannon to his London airports.
He even sought, unsuccessfully, to use his position as Aer Lingus’s biggest shareholder to force the Aer Lingus to reverse the Heathrow decision.
O’Leary got great media play from being Shannon’s saviour.
This week, Aer Lingus announced plans to add a daily route between Shannon and London Gatwick from late March. This will complement its daily service to Heathrow, which was restored some time back.
Aer Lingus has also launched a handful of regional services from Shannon in recent times as part of its franchise deal with Aer Arann.
And it is opening up a Shannon to Paris route while Ryanair has abandoned its flights to Paris Beauvais.
This is part of a major scaleback at Shannon by Ryanair due to a failure to agree a deal on passenger charges with the airport manager and a long-running spat with the Government over the travel tax.
Ryanair had enjoyed a generous deal on passenger charges – roughly €1 per a head – with Shannon for some years but the airport was unwilling to offer a better deal on renewal.
Such is the turnaround in Aer Lingus’s status in Shannon that its decision to axe transatlantic flights from the airport for the first few months of this year has barely registered a murmur of protest in the mid-west.
Ryanair’s scaleback at Irish airports during the recession has allowed Aer Lingus to increase short-haul fares and boost yields.
But it would be folly to write off O’Leary.
With the air travel tax being cut to €3 from March, will O’Leary be tempted to open new routes from Ireland and once again go after his biggest rival here?
They might yet see more of Ryanair in Shannon.
McCann to kick off Cardiff Maldron just in time for cup finals
HOTELIER PAT McCann is gearing up for the launch of the Maldron Hotel in Cardiff on May 11th – just in time for the city’s staging of European rugby’s Heineken and Amlin cup finals that month.
“We’re already seeing strong demand for rooms and we haven’t started the marketing push yet,” McCann told me yesterday.
The budget hotel is well-located in Cardiff, close to the train station and the Millennium Stadium. It will be Maldron’s first in the UK. “We’d love to do more there but funding is the big issue.”
McCann heads Dalata Ltd, which operates 10 Maldron properties and has management contracts for nine other hotels.
Dalata won a handful of contracts in 2010, including the Heritage properties and Jim Mansfield’s Citywest Hotel in Saggart.
Dalata posted revenues of €31.5 million on “continuing operations” in 2009. McCann said like-for-like revenues for last year would be down but profit was up.
Its top-line figure would also be boosted by the new contracts.
Dalata will also be “Ebitda positive” for 2010, having posted a loss of €39 million in 2009.
This was due largely to a goodwill impairment that won’t be repeated.
McCann said the 774-bed Citywest Hotel is “trading well”, having hosted Top Gear, Disney on Ice and the World Darts Grand Prix lately.
Its average occupancy rate is in the 40 per cents. “It’s largely driven by event business.”
But he’s under no illusions about the challenges ahead in Ireland.
“It’s going to be difficult for another year or two. We’re having to deal with a decline in visitors from our two main markets – the US and Britain – and overcapacity in the sector. It’s challenging.”
Little Things
EIRCOM LOST another manager before Christmas. Richard Griffiths, director of TV and entertainment, left the business just before the break.
Griffiths was a middle-ranking member of the management team. But a number of heavy-hitters have left in recent times, including finance chief Peter Cross, corporate affairs director Andrew Haire and eMobile director Conor Carmody, who has switched to Vodafone. Mark Wilson was this week appointed as interim chief financial officer, taking on Cross’s duties.
It seems Wilson won’t be filling the post long term and an external search for a replacement is under way.
*****
In the same week that Britvic announced plans to cut 100 jobs at its Irish business, whose brands include Club soft drinks and Ballygowan water, Goldman Sachs initiated coverage of the listed British company with a “neutral” rating.
The broker prefers Coca Cola Hellenic, which has a “buy” rating.
It said Coca Cola has a 56 per cent share of the Irish cola market.
Pepsi has 37 per cent.
Goldman cited the “challenged” market in Ireland as one of the potential downside risks to Britvic.
