Bewley’s to pay €749,000 to Ronan group to settle arrears on Grafton Street cafe

Bewley's has agreed to pay more than €749,000 in rent arrears and interest costs to the landlord of its cafe on Grafton Street.

However, the company has yet to provide Ronan Group Real Estate, which is controlled by property developer Johnny Ronan, with a date for reopening the cafe, which has been shut since March 16th.

This is one of the conditions RGRE wants met before agreeing to withdraw legal proceedings in relation to the arrears.

Bewley’s has agreed to pay arrears of €732,000 and interest of € 17,422 to RGRE by July 31st. It has also agreed to pay RGRE’s legal costs although a sum has not yet been agreed by the two parties.

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In a letter dated July 24th, RGRE’s legal adviser sought an “unequivocal commitment in writing” from Bewley’s that it would “recommence trade as soon as possible” by August 7th.

In a response two days later, Bewley’s legal adviser told RGRE it would “use its best endeavours to reopen the premises as soon as possible. We will revert to confirm a date in due course”.

In a statement to The Irish Times, Bewley’s said it had “commenced initial planning for the reopening” of the Grafton Street cafe.

“Part of the re-opening plan involves assessing the modifications required to our offering in light of current trading conditions. This, in turn, will determine required staffing levels. We will remain in close contact with our staff as this process evolves.”

Bewley’s added that the health and safety of employees, customers, suppliers and visitors to the cafe was “crucial” and said it would work to an “appropriate timeline to ensure we achieve this objective”.

In May, The Irish Times revealed that the operator of the cafe, Bewley's Ltd, which is owned by artist Paddy Campbell, had decided to shut the premises permanently.

On July 1st, the cafe’s 110 staff were informed they were being made redundant. The closure was blamed on the impact of the Covid-19 pandemic on the economy, and the €1.5 million annual rental cost on the protected structure. The cafe has been lossmaking for a number of years with the rent accounting for 30 per cent of its annual sales.

RGRE responded to Bewley’s decision by issuing a petition for the winding up of the company that operates the cafe. The matter went to mediation but no agreement was reached.

Trading conditions

In a letter sent to RGRE on July 24th flagging a change of mind on the closure, Bewley’s said it had “now raised appropriate finance” and was in a position to discharge its rent arrears and “interest owing under the lease and the landlord’s reasonable costs”. The offer was subject to RGRE withdrawing its legal proceedings.

Bewley’s said it had been “carefully monitoring trading conditions within the marketplace, assessing the potential of newly-introduced Government supports, identifying opportunities for reductions in overheads and the realisation of existing assets, and engaging with providers of finance”.

RGRE’s response was that it was “at a loss as to why any of the cafe’s employees had to be made redundant” only for it “now to obtain ‘appropriate finance’”.

Bewley's Oriental Cafes Ltd opened on Grafton Street in 1927 and is probably the best-known coffee shop in Dublin. The wider Bewley's coffee and tea group has annual turnover of about €147 million, and made a pre-tax profit of €739,000 in 2018, according to its latest accounts.