Debenhams clashes with Roche family over restructuring

Retailer rows with family over examinership application

The Debenhams store on Henry Street, Dublin. Photograph: Eric Luke/The Irish Times

The Debenhams store on Henry Street, Dublin. Photograph: Eric Luke/The Irish Times

 

Debenhams, the British retail chain with 11 outlets in Ireland employing 2,200 staff, has become embroiled in a row with the Roche family that once owned Roches Stores.

Debenhams bought Roches Stores from the Roche family for €29 million in 2006 and rebranded it, although the family held on to the properties.

Details of the row have emerged in documents given to the High Court as part of Debenhams’ Irish division’s application for examinership, a form of court protection while it restructures its finances.

Debenhams Ireland wants to cut its staff costs and also for its landlords to slash its upwards-only rents, warning it could go bust otherwise.

The Roche family has since sold most of the properties, but remains the landlord on upwards-only rent agreements on Henry Street in Dublin and on St Patrick’s Street in Cork.

Richard Roche, a leading member of the media-shy family, accused Debenhams of filing a “tainted” examinership application. He alleged it was grounded on an “incomplete and inacurate” picture of the Irish division’s finances.

Debenhams strongly rejected the accusation, and accused Mr Roche of seeking commercially sensitive information.

Mr Roche told the court he understood the Henry Street and St Patrick’s Street outlets generate 40 per cent of Debenhams’ Irish revenues of €167 million.

Zara sublet

He complained Debenhams would not tell him how much money it gets from Zara, a Spanish clothing chain.

Mike Hazell, a senior financial executive of Debenhams’ UK parent, countered that this was commercially sensitive, and said it was irrelevant as the Debenhams Henry Street store itself was still loss-making.

Mr Roche said he has held talks with Debenhams in the UK for two years about “reconfiguring” the two sites, but the retailer walked away.

He also referred to a report on Debenhams by Deloitte, which raised issues including a €55 million “dividend” taken from the Irish arm by the UK parent in 2013.

Mr Roche alleged the dividend had “crippled” the Irish division, but Mr Hazell strongly rejected this argument.

Kieran Wallace of KPMG was confirmed by the court as examiner yesterday, and has 100 days to assemble a rescue package.