New chief bringing bags of experience and enthusiasm to Arnotts challenge

INTERVIEW:American retail guru tasked with getting tills ringing at iconic Dublin department store

HE MIGHT have gotten under the skin of Arnotts trading performance over the past five months but its new executive chairman, American Mark Schwartz, had to open a couple of presses yesterday before locating the milk in the retailer’s boardroom.

There’s still much about the company that Schwartz has to learn about, a point he would readily acknowledge. But he’s up for the challenge. “I like running retailers . . . this is what I do.”

On Monday, Brussels gave the green light for Anglo Irish Bank and Ulster Bank to swap their €300 million-plus Arnotts loans for ownership control of the 167-year-old department store on Dublin’s Henry Street.

In January the banks had knocked on Schwartz’s door in Boston and asked him, and his company, Palladin Capital Group to help them with Arnotts.

The global financial crisis and the recession had knocked the €750 million Northern Quarter project for six.

Schwartz’s job was to focus on the knitting and get the tills ringing up more transactions.

“Sales have been good but I think they can be better,” he told The Irish Times yesterday in his first media interview since being appointed as chairman.

He says the increase in sales will be “high single digits” and the company will be “Ebitda (earnings before interest, tax, depreciation and amortisation) positive” when its current financial year closes at the end of next January.

He talks of wanting more in-store “innovation” and has initiated some changes to the layout of the ground floor.

A number of new brands – Thomas Pink, Reiss and Bobby Brown cosmetics – are being introduced this autumn.

“With any retailer it’s a while before you see the changes . . . you have to think a year ahead,” he says.

So what could Arnotts do better? “We’re a service business. We have to provide the best level of service possible, anticipate needs more. We can do a better job at that.”

Bargain hunters will be pleased to hear that its discount shop in the basement won’t be axed. “It’s a very profitable part of the operation. It’s a business that can really thrive on its own and could have multi destinations.”

He also feels the company could do a “better job at reaching out to customers”.

Arnotts is known and liked throughout the country but has never strayed from its Dublin roots. With no money in the kitty to expand to other locations, Schwartz wants to target online sales more aggressively. “I certainly want to consider that.”

The Boyers shop on nearby Talbot Street, once slated for closure, will also be retained. “I need to spend more time working on Boyers,” he says. “It has a lot of potential but I need to look at it closely and figure out my goals.”

Schwartz has a reputation as a turnaround specialist in the retail and consumer products sector. His career has spanned 30 years, the last seven as chief executive of Boston’s Gordon Brothers Group.

As executive chairman, Schwartz will “captain” the ship, although he doesn’t intend to live in Ireland. “I’ll commute from the States but I’ll be here quite a lot,” he says.

The board has already been revamped – with only former major shareholder Richard Nesbitt retained – and changes are expected at executive level.

Group chief executive Brian Kearney has already left the company and finance head Declan Delanty is also departing.

A number of consultants including Genesis have been drafted in to do customer research. But Schwartz says staff have nothing to fear. “No major changes are anticipated for the staff,” he said. “I can’t guarantee that there won’t be some changes from time to time but no major ones are planned.”

The big question is about Arnotts’ long-term future. What will happen to the surrounding properties that were bought to create a five-acre plot for Northern Quarter? “It’s on hold,” he said. “Too much money was was spent on a project that does not make sense in today’s economic environment.

“Our focus in on the core retail operation.”

And will Arnotts be sold, possibly to an overseas buyer?

“That’s not even on the radar,” he said. “My focus is to run a really strong retail organisation that continues to increase its market share.

“It’s my intention that this company survives for another 150 years.”

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