Debts finally come home to roost for Cullen
BILL CULLEN’s 2001 autobiography, It’s a Long Way from Penny Apples, tells his story as the ultimate rags-to-riches yarn.
Born in Summerhill in Dublin’s north inner city, one of 14 children, he cut his business teeth working at his mother’s stall on Moore Street, selling fruit, sweets and whatever else, an experience he says stood to him during his rise to the top of the motor trade.
He has always been proud of his success, so yesterday’s loss of his cherished motor business is sure to hit him hard. The news will also attract plenty of attention.
Unlike most other Irish business people, he’s not shy of the media. Up to last year, he hosted TV3’s version of The Apprentice reality series, which also featured his partner, Jackie Lavin. He regularly appears on chat shows, while he and Lavin often pop up in the gossip columns.
Like so many of his peers, Cullen has been credit crunched. Glencullen Holdings, which operated the Bill Cullen Motor Group, ran up major debts during the years of the property bubble when car sales soared.
These have now come home to roost in spite of four hard years spent battling the recession.
This year, car sales are expected to be around the 78,000 mark, down from about 90,000 last year. In a statement, Cullen said the decision by Ulster Bank to appoint receivers to his business reflected the “poor state of the motor industry today with consumer confidence at an all-time low and consumers not purchasing new cars”.
“Combine that with the expenditure that car dealers invested in the large dealerships that were needed to meet the criteria for the car manufacturers,” he said. “Car dealerships built at Celtic Tiger prices have been written down by more than 70 per cent. With the dreaded December budget on the horizon, the poor forecast for 2013 car sales does not give any confidence to the banks.”
At the end of 2010, Glencullen Holdings owed €14.3 million in loans and overdrafts to Ulster Bank and €19.5 million to Mr Cullen. The bank’s loans are thought to have reduced to about €12 million currently.
The company made a loss of €1.5 million that year, down from the €10.5 million deficit in 2009. This was in spite of a 600 per cent increase in new vehicle sales in 2010, largely driven by the Government’s scrappage scheme, which has since been ended.
Cullen left school at 13 to work at his mother’s stall. The following year, Walden’s Ford dealership in Dublin hired him as a messenger boy; 11 years later he was running the business. He went on to set up the Fairlane Motor Company, which became one of the Republic’s biggest Ford dealers.
In 1986, he took over Renault’s ailing Irish distributorship, paying just IR£1 but taking on £18 million debt. Cullen turned it around, hitting a peak in 2002, when sales were €275 million and profits were more €11 million. The accounts show he earned a €2.2 million dividend that year.
Sales never reached this level again. In 2006, the height of the boom, the group lost close to €4 million. The same year, the French government recognised Cullen’s contribution to Renault Ireland by awarding him the Légion d’Honneur.
In 2007, Renault took back control of its distributorship franchise from Glencullen. He continued with four of the marque’s dealerships, two in Dublin, one in Ennis, Co Clare and one in Galway. The company lost €18 million in 2007, which was also the peak for new car sales in the Republic, which reached 185,000.
In July of this year, his dealerships in Ennis and Galway closed with the loss of 29 jobs. In August, it emerged that he would lose the Renault dealership, a real blow given his long association with the French car maker.
He retains ownership of the Muckross Park Hotel and Cloisters Spa in Killarney, which he and his partner Jackie Lavin bought in 1990.
The hotel is said to be trading profitably at present.