Tommy Hilfiger to close Grafton Street store
US fashion retailer exercises break option in lease 12 months early and pays €1.7m rent due
The closed former Tommy Hilfiger store on Grafton Street. Photograph: Damien Eagers/The Irish Times
Having remained closed since last Christmas due to Covid-19 restrictions, the US fashion retailer has decided to shut its flagship premises permanently.
While the impact of the pandemic is believed to have influenced the move to a certain degree, it is understood that the company has decided to exercise the 15-year break option on its 25-year lease 12 months early.
In handing back the keys to its landlord now, Tommy Hilfiger is believed to have paid the near €1.7 million rent due for that period. The retailer has occupied the premises at 13-14 Grafton Street since 2007.
The property has changed hands twice since then. In 2009, the building was acquired for about €25 million by the German-headquartered real estate investment group Deka Immobilien. Having derived the benefit of seven years’ of boom-era rental income, Deka secured a significant uplift on its original investment when it sold the property quietly to the Brennan family, owners of the well-known bread business, for about €35 million in 2016.
A spokeswoman for Tommy Hilfiger said: “In line with our strategic objective to further reach and engage with our consumers, we are focusing on next-generation retail experiences to stay ahead of continuously changing shopping behaviours.
“Investment in the Grafton Street Tommy Hilfiger store will be refocused towards expanding our portfolio in select, highly visible locations in Ireland, as well as building direct, personalised relationships with next-generation consumers through both our own digital channels and those of key strategic partners. This is in addition to 20 Tommy Hilfiger points of sale and tommy.com that continue to serve the market.”
Other Irish stores
The US retailer continues to trade from its other Irish stores. These include premises at the Dundrum Town Centre, Liffey Valley Shopping Centre, the Pavilions in Swords, Kildare Village, the Crescent Shopping Centre in Limerick, Athlone Town Centre, Shop Street in Galway and Mahon Point in Cork.
Although 13-14 Grafton Street will be expected to attract interest from a number of prospective occupiers following Tommy Hilfiger’s departure, the rent achievable for the property is likely to be significantly lower than that agreed at the height of the boom.
In January of this year, Hugo Boss secured a 24 per cent reduction on its previous rent of €825,000, when it signed a new 10-year lease on its own flagship premises at 67/68 Grafton Street.
The premium German fashion retailer has agreed to pay €630,000 per annum for the store which comprises 535sq m (5,775 sq ft) of retail space over three trading floors in addition to ancillary upper floor levels.
Tommy Hilfiger’s Grafton Street premises, for its part, comprises 557sq m (6,000sq ft) of retail space at ground, first and second floor levels, and a further 325sq m (3,500sq ft) of ancillary space.