The Karen Millen ladies' fashion store on Dublin's Grafton Street is to close and make way for another trader.
A number of international brands have already registered their interest in the shop, the only substantial premises now available to rent on the street.
The planned closure around the end of this month follows a decision by the owners of the building to avail of a landlord’s break option in the lease to take back the premises and upgrade it before reletting it at a higher rent to another top fashion brand.
The closure is not related to separate moves by the High Court-appointed examiner, Declan McDonald, of PwC, to prepare a survival plan for Karen Millen Irl. Ltd, Warehouse Fashion Irl. Ltd and Coast Stores Irl. Ltd.
The court has been told that while the trading position of the companies has improved since last year, the examiner was seeking a buyer for some of the stores and was also planning to renegotiate a number of rents.
Karen Millen has standalone stores in Dundrum, Kildare Village and Whitewater in Newbridge as well as Grafton Street and operates five concessions through Brown Thomas at Grafton Street, Limerick, Galway and Cork, BT2 in Blanchardstown and Clerys on O'Connell Street.
A London spokesperson for Karen Millen said that the company was looking forward to a “long term” future in the Irish market.
Move beyond dresses
The retailer has been spun out of the Aurora Group and is now directly owned by Kaupthing, the Icelandic bank, which holds 90 per cent, with Karen Millen's management controlling the remainder.
The new owners have embarked on a plan to cast off Karen Millen’s “Footballers Wives” image and transform it into a high-end high-street fashion brand, emphasising its quality, the fact that its range extends beyond dresses and that all of its clothes are designed at its head office in Shoreditch.
Substantial rent increase
Karen Millen originally paid a rent of €1,050,000 for the Grafton Street store until the property crash when its then landlords, the Salix Trust – a Bank of Ireland staff pension fund – reduced it to €450,000.
The building was one of 13 Dublin investment properties sold to IPUT Property at the end of last August for €115 million.
The pension fund is now expected to avail of Karen Millen’s departure to reconfigure the building, which has an overall floor area of around 929sq m (10,000sq ft) on five levels.
Ideally, the new layout should include at least 278sq m (3,000sq ft) of retail space on three levels.
Stephen Murray, of letting agents JLL, is expected to seek a substantial increase on the existing rent. This should be achievable in view of the shortage of trading locations on the street and the pick-up in business over recent months.
IPUT's other investments on Grafton Street include a half share, with Aviva, in the former HMV store, which has a retail area of more than 1,235sq m (13,300sq ft) over three levels.
It was originally let at €1.7 million but after HMV pulled out, the rent was reduced to €865,000 to attract the heavyweight fashion trader Massimo Dutti.