Clerys to close doors as store is sold to joint venture

Clerys has seen many dramas unfold on its doorstep since it opened for business in 1853 but few as eventful as yesterday's. At about 1.30pm staff were told the department store had been sold by Gordon Brothers to Natrium Ltd, a joint venture between Irish investment group D2 Private and Cheyne Capital Management (UK) LLP, with funding from US-based Quadrant Real Estate Advisors.

Four hours later, they were told to gather at the bottom of the main staircase in the O'Connell Street store and, at about 6pm, liquidators from KPMG broke the news that Clerys was closing for good.

"Everyone is just shocked at the minute," said Maureen Deans, a 15-year veteran of Clerys, who was leading the sit-in by workers at the store last night. For their loyalty over many years – some Clerys employees have worked there for 44 years – staff are to receive just their statutory entitlement. "Two weeks' wages for 44 years of service . . . it's just not good enough," Ms Deans said.

It was one of the world's first purpose-built department stores, beginning life as The New or Palatial Mart by McSwiney, Delany and Co. The store was bought 30 years later by Michael J Clery, who renamed it and so the Clerys brand was born.

During the 1916 Rising, the building was destroyed. All that remained was the facade, towering over the smoking rubble of the fallen floors.

Clerys took up temporary residence for six years in a warehouse on Lower Abbey Street while repairs took place to return it to its former glory. It reopened on August 9th, 1922.

In 1941, Clerys was bought out of receivership by Denis Guiney, who had previously run a successful shop on Talbot Street. Under Guiney, Clerys became known for its quality merchandise at affordable prices.

Ballroom dances

It was also the scene of many a romantic evening with the ballroom hosting dances every night with a full-time orchestra, while the Clerys clock became an established meeting point for dating couples.

To mark the 50th anniversary of Guiney’s takeover of Clerys, a new clock was unveiled in 1990 and it has continued to be a landmark for Dubliners.

In 2004, Clerys revealed a new look, following a six-year development programme. Each floor was revamped to offer a modern shopping experience. Around that time, the company began to buy up neighbouring properties at boom prices, transactions that were to come back and haunt it when the economy imploded in 2008. Falling sales meant Clerys struggled financially and it was eventually acquired out of another receivership by Boston-based Gordon Brothers, ending the Guiney family’s long association with the business.

Gordon Brothers paid €14-€15 million to buy Bank of Ireland’s €26 million debt with Clerys and spent about €8 million on modernising the store.

While the O’Connell Street premises was acquired by Gordon Brothers, the Guineys shop on Talbot Street and Clerys furnishing outlets in Leopardstown and Naas were closed.

On July 24th, 2013, the hands of the famous Clerys clock stopped marking time at 1.37am, when the power supply failed, as water cascaded through the store following storm damage to the roof.

It reopened to much fanfare on November 21st that year but this would be only a temporary reprieve for the famous department store .

Liquidation

At 2.30am yesterday, the business was sold by Gordon Brothers and by the close of trading Clerys had been placed into liquidation. The High Court was told it had accumulated losses of €4.3 million between August 2012 and last January.

It had survived with the support of loans from a parent company. While the loans are not repayable until September 2016, the change of ownership meant a demand for repayment could be made.

Financial projections showed a cash-flow deficiency in August and OCS Operations, the entity that ran the store and which has been placed into liquidation, would require further funding from the parent, which would not be forthcoming.

In addition, OCS Operations operated via a lease from OCS Properties, a sister company, which expired earlier this year. The latter was unwilling to grant a new lease.

OCS Operations had no entitlement to remain in the store and so the death knell sounded for Clerys as a trading entity.

The brand could be bought from the liquidators and revived by someone else at a different location but this seems unlikely.

Natrium offered no comment last night as to its plans for the prime O’Connell Street property but sources suggested that it would be redeveloped for a mix of retail, offices and possibly even a hotel.