Which Dunnes Stores rival will pursue Donnybrook Fair?

The ending of discussions between Dunnes Stores and Donnybrook Fair about a takeover deal looks like a missed opportunity for Ireland's largest retailer.

Dunnes has long coveted a luxury brand in the food retailing sector to add some stardust to its upmarket drive. It has acquired brands in recent years such as James Whelan butchers and Café Sol and it tried to buy Avoca Handweavers.

Donnybrook Fair, whose six epicurean stores are located in some of Dublin and Wicklow’s most affluent areas, would have been a perfect fit.

Any buyer of Donnybrook Fair would have to take on its loans of about €10 million. On top of that, Joe Doyle and his wife and co-founder, Mary Doyle, would also have been looking for a substantial payment for their equity. They did, after all, build the business from scratch and it effectively represents their life’s work.

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The ending of the talks with Dunnes has alerted other major Irish retailers to its potential availability, should the Doyles wish to find another buyer.

Obvious suitor

The Cork-based Musgrave group, the owner of SuperValu and Centra, would appear to be the most obvious suitor for Donnybrook Fair. It wants to increase its presence in the lucrative Dublin market, where the bedrock of its position comprises the old Superquinn chain that it bought during the recession.

A deal for Donnybrook Fair would take Musgrave right into the backyard of the sort of upmarket customers it craves for SuperValu. It has also devised a new seven-year strategy to reposition its retail brands as foodie offerings, and Donnybrook Fair would buttress this.

BWG, the owner of Spar, also has the firepower to do a deal, but it appears to be more focused on expanding its wholesale and foodservice businesses, and is unlikely to make a bid for Donnybrook Fair.

An outside bet might be one of the forecourt retailers, such as Maxol, sources suggested. With wafer-thin margins in the fuels sector, operators are cognisant of the trend in retailing towards upscale food offerings.

Donnybrook Fair is an attractive epicurean brand. One of its larger rivals is likely to take a bite at it eventually.