Dunnes Stores is in advanced discussions with the owners of the Donnybrook Fair chain of upmarket supermarkets about a potential acquisition.
The talks on a possible tie-up between Ireland’s largest indigenous retailer and Donnybrook Fair, which has six outlets in Dublin and Wicklow, have been ongoing for some time and sources suggested they are nearing a conclusion.
Dunnes, following its usual policy, did not respond to a request for comment yesterday. Joe Doyle, the co-founder of Donnybrook Fair, also made no response to texts and voicemails asking for comment on the ongoing talks.
If the two sides reach a deal, it will represent the most ambitious strategic move yet by Dunnes to build its presence into the upscale food retailing sector.
It embarked upon the strategy in recent years as the State emerged from recession and consumers’ tastes moved upscale, even as they expect low prices.
Dunnes began the pivot in 2015 by buying the Café Sol chain of coffee shops. It has since begun to incorporate the brand into its stores as they get revamped.
After an attempt to buy Avoca Handweavers, which Aramark bought in 2015, Dunnes later succeeded with a bid for the retail operations of the James Whelan chain of butchers that supplied Avoca.
It has also struck a partnership deal with Sheridan Cheesemongers and, most recently, celebrity garden designer Diarmuid Gavin, who has curated a range of designer plants and accessories for Dunnes that will launch in the first eight outlets later in the summer.
However, a potential deal for Donnybrook Fair, which has outlets in well-to-do areas such as Donnybrook, Malahide, Stillorgan and Greystones, would represent a significant escalation of its approach.
If an acquisition is completed, it would give Dunnes possession of the luxury brand it has been seeking since missing out on Avoca.
Donnybrook Fair was co-founded by Mr Doyle and his wife, Mary Doyle, who each own a 50 per cent share. It has annual sales of more than €27 million. The group returned to profitability in the year to the end of January 2017, while its sales rose by more than 15 per cent.
The group employs about 240 people, and is planning further expansion with a €500,000 revamp of its flagship store in Dublin 4, where it also runs a cookery school.
Donnybrook Fair also owns a stake in a company that owns the Morehampton Foods artisan producer. It makes products such as soups, salads, cereals and confectionery, and has an exclusive deal to supply Donnybrook Fair.
The Doyles recently also established a new holding company, Fountain Hill Investments, although it is unclear where it fits into their business structure as it is yet to file accounts.