Clerys never bargained for such a downturn
For many shoppers it is hoped that the arrival of Gordon Brothers will mark a new era in the 150-year history of Clerys.
GORDON BROTHERS THE NEW OWNERS
GORDON BROTHERS is a private equity and investment house based in Boston.
Founded in 1903, the company specialises in buying and selling retail assets. It has been involved in a number of high-profile restructurings, including the liquidation of US bookseller Borders.
After investing €10 million as part of a €90 million financing package for the troubled book chain in 2010, Borders entered bankruptcy the following year, and Gordon Brothers oversaw the winding down of the chain.
It also acquired the assets of troubled photography giant Polaroid in 2009.
The firm has connections with Palladin Capital Group, the US private equity group which is running Arnotts on behalf of lenders Anglo Irish Bank and Ulster Bank.
Mark Schwartz, the head of Palladin Capital Group, is a former executive of Gordon Brothers.
Palladin was at one stage involved with Gordon Brothers as part of a private equity joint venture but later separated from the company.
Gordon Brothers’ European division – Gordon Brothers Europe – is taking over the running of Clerys.
In 2010 the company bought loss-making HPJ Jewellers, which comprised 78 jewellery stores across the UK.
Gordon Brothers closed 26 of the worst-performing stores and reduced the headcount, resulting in the safeguarding of more than 320 jobs.
It has said it is committed to investing in and revitalising the department store.While Siptu yesterday expressed “cautious optimism” that jobs would be protected, the scale of the new owner’s challenge is thought to be significant, with some retail sources suggesting further restructuring is possible. SUZANNE LYNCH
END OF AN ERA FOR GUINEYS
THE HIGH Court yesterday approved the appointment of liquidators to Clery’s sister shop Guineys store in Talbot Street and Clerys’ two home furnishing stores in Naas and Leopardstown.
Taite and Seán Kelly of RSM Farrell Grant Sparks were appointed provisional joint liquidators to wind up Dennis Guiney Furnishings Limited, Naas, Co Kildare, and Leopardstown, Co Dublin, and Guiney and Co, Talbot Street, Dublin. The 29 employees based at these stores will be made redundant.
Michael Guiney stores, a separate company, is not affected.
Clerys new owners, US finance house Gordon Brothers, met with unions and staff at the O’Connell Street store yesterday.
Siptu representative Graham Macken expressed “cautious optimism” the new owners will provide job security to Clerys employees based at its O’Connell Street store.
Some 147 people are employed directly by Clerys at the store, while more than 200 work for the 49 concessionaires there.
Mr Macken raised concerns about pension arrangements for staff. Clerys new owners have not taken on the liabilities of the firm’s existing pension scheme though they have indicated an alternative scheme will be provided, Siptu said.
Clerys chief executive PJ Timmins and finance director John Roe are expected to remain with the company for the time being. The Boston-based private equity group is believed to have paid about €15 million to acquire the retailer’s €26 million debts from Bank of Ireland.