Category: News (102)

Ireland’s government is set to abandon plans to outlaw upward-only rent reviews for commercial property.

Retail lobby groups were briefed on Friday that the plan to introduce retrospective downward rent reviews on commercial property and ban future upward-only rent reviews were likely to face insurmountable constitutional difficulties.

The likely move is a blow for tenants facing huge above-market rents agreed during the boom years of the Celtic Tiger.

But it is a key victory for landlords facing a further hit to the value of property which has already fallen around 60% from the height of the market, according to IPD, and particularly the Irish National Asset Management Agency, which bought €71bn of property loans from the nation’s banks.

Nama is now the de facto largest property owner in Ireland, and has said that a ban on upward-only reviews could cost it €2bn in property losses.

The pledge to end upward-only reviews was a key part of Fine Gael’s pre-election manifesto when it came to power in a coalition with the Irish Labour Party in February.

Story by Mike Philips on Propertyweek.com on 21/11/11 http://www.propertyweek.com/news/irish-government-u-turn-on-upward-only-rent-reviews/5028078.article

A Co Down property company will face a winding-up petition in Belfast’s High Court court this morning over an unpaid bill.

The petition being brought by planning consultant Turley Associates against Brook Campbell Developments is understood to relate to a debt that has been owed by the company for over a year.

In a further blow, Brook Campbell in Dundonald has also had 20 properties in its portfolio repossessed by First Trust Bank. Around 20 are set to go on sale after fixed charge receivers were appointed by the bank. The properties on sale are in Belfast, Bangor, Dundonald and Conlig.

BTW Shiells commercial property estate agents is selling the properties after being appointed as the fixed charge receivers.

Brook Campbell was set up in 1999 to carry out engineering and construction work. Stephen Deyermond, a consultant at commercial property agents TDK in Belfast, said fixed charge receiverships were becoming more and more common and that his firm had received “frequent” instructions from banks in Northern Ireland.

“These appointments arise when banks have to take action with regards to loans relating to property assets, frequently as a result of insolvency,” Mr Deyermond said.

“Fixed charge receiver is a simpler and usually more cost effective route for funders to take than administration and, depending upon the nature of the charge or status of the borrower, allows the lender to secure swift control of the property asset.

“While receivers are typically appointed with the intention of realising the asset, we are also appointed where following insolvency the lender believes that we could apply our property expertise to achieve better outcomes than the borrower.”

Activities of a fixed charge receiver include co-ordinating the letting of vacant units, achieving planning consents or project management.

Banks appoint receivers to realise the assets – but the fixed charge receivers may also instruct separate estate agents to carry out the sale.

Taken from Belfast Telegraph article by Margaret Canning on Thursday 17th November 2011.

http://www.belfasttelegraph.co.uk/business/business-news/property-company-could-be-woundup-over-unpaid-bill-16078723.html

Ebullient chief Jim McCarthy is confident the chain’s bargain basement forumla will conquer Ireland as it has the UK – albeit with a name change.

On September 28, the day after Poundland, the British value retailer, opened its first Dealz store in Portlaoise, a coach pulled up outside the shop and disgorged its payload of shoppers.

In recession-hit Ireland, the cut-price store had, within 24 hours of opening, become a destination for consumers.

“That has never happened to us before, anywhere,” said Jim McCarthy, the Poundland chief executive. McCarthy, second-generation Irish and sporting a dazzling green tie embossed with the Dealz logo, is an old-school retailer.

Ebulliently cheerful and brimming with enthusiasm, he is part-showman, part hard-nosed businessman, and bears an uncanny resemblance to Mick McCarthy, the Wolves football manager and former Ireland’s manager.

This is one of two Dealz stores that opened in late September. The other is in Blanchardstown, and both are performing “brilliantly well”.

With little fanfare, and no advertising, both are clocking up a combined 24,000 transactions a week, above the average for a UK Poundland store.

In Britain, the average spend is £4.25 (€4.84), McCarthy says. The average spend in Ireland is much higher. The two Irish stores are taking more than €100,000 a week combined.

“To me, what that really says is that the value differential between our prices and the competition is higher here, which is very encouraging,” said McCarthy. “Lots and lots of customers buying lots and lots of stuff.”

For the past two years, McCarthy has been opening a lot of shops, an average of more than one a week in Britain. There are now 364 Poundland shops, which McCarthy thinks makes it Europe’s largest single-price retailer.

Next month he will open a third Irish store, in Killarney, plans to have a fourth outlet open by Christmas, and has said that he will have six stores here by the end of March 2012.

However, that number may well be on the conservative side. Javelin, the market research company, believes that the Irish market can sustain at least 50 Dealz stores.

McCarthy opened his first shop in Northern Ireland in the autumn of 2009. He now has 20.

“Our track record is to over- deliver,” he said.

He does not hang about, either. The record time for converting a vacant premises into a Poundland shop is 12 days, he says proudly; the average is 14 to 21 days.

The Dealz stores are likely to spring up literally anywhere across the country over the next six months.

Dealz is the private-equity owned Poundland’s first step outside the British market.

Market research discovered that putting “Euro” over the door was a negative as far as shoppers were concerned, not just in Ireland but across Europe, so Dealz it is.

In crossing the currency divide, the company has also dropped the single price formula. “Some 98% to 99% of goods are at €1.49, and a small number are at €1.99,” said McCarthy. “You can still go in and buy 10 items for €15.”

Otherwise, the model is well and truly set. Dealz offers 1,100 branded products, mostly in the food, drink and personal care lines, which create a “halo effect” by attracting customers who then buy further goods from across the 17 different categories, from gardening tools to birthday cards.

The Irish stores, McCarthy says, are following the UK-buying patterns pretty closely. The overall, top-selling product is milk, while the single biggest-selling item is Toblerone chocolate.

“We sell 4m Toblerones a year in the UK,” said McCarthy, who appears to be constantly amazed by his own sales figures. The other big seller is an 11-pack of Kodak batteries — “a 10-pack plus one extra free,” he explains — for €1.49. “Amazing value.”

McCarthy, 55, has a string of retailing punchlines. When a customer brags about a bargain, that’s being “Poundland proud”.

“We say that every day is Christmas in Poundland. And in fact, during Christmas, we are five times busier again.”

McCarthy has been in retailing, man and boy, for more than 40 years. His grandparents left Cork in their early twenties to settle in the English Midlands to start a family. His dad was one of nine children, eight of them boys.

McCarthy got his first job when he was 12, doing a paper round for Dillons, a chain of newsagents, in Nuneaton. He left grammar school five years later to join the retailer full time.

By the age of 25, he was put in charge of the Argus chain of newsagents on the English south coast. “It was far enough away from the centre for me to be able to make mistakes,” he said

One of his successes was to convert a number of newsagents into convenience stores. “We could see that was where things were going,” he said.

The fashion chain Next then bought Dillons as part of the retail legend George Davies’s ill-fated diversification plan. When Next hit the skids, Dillons was sold off to T&S, a quoted convenience store chain.

At T&S, McCarthy was brought under the wing of Kevin Threlfall, who taught him the value of enjoying his job. “Have fun and win” is how McCarthy sums it up. It is now the retailer’s guiding philosophy.

“You have to be optimistic to be a retailer,” he said, beaming. “For staff, for customers, it is just not good to go around with a long face.”

McCarthy made “a few million” when T&S was sold to Tesco for £530m in 2002. He had helped to build the convenience estate up into an empire of more than 800 stores.

After the sale, he took 18 months off. He was then hired to revive Sainsbury’s convenience stores, working under Justin King.

He says that he “fell into” the Poundland job in 2006. Long working hours and a lengthy commute meant he was doing 15-hour days at Sainsbury’s.

With family matters to consider, he wanted to relocate to the English midlands. Poundland, then owned by Advent International, was looking for a managing director. He walked into the business cold.

“Within three weeks, I said to myself, wow, this is a great business,” he said.

Advent quadrupled its money in 2010 when it sold Poundland to Warburg Pincus, another private equity company, triggering another pay day for McCarthy.

He invested a big chunk of his windfall back into the company.

Ireland is an important step for the group because it will reveal whether the model can travel. The €1.49 price point is a fair way ahead of the £1 used in the British stores.

“We have to ship product here, and operating costs are higher, staff costs are higher,” said McCarthy.

He says that he hopes to meet Irish suppliers early in the new year and he is confident that he can get more on board. The discount[ chains Aldi and Lidl] “have done a fair bit of the ground work for us”, he said. “We are a low-margin, low-cost operator. What matters to suppliers is not the low price we charge customers, it is the price they get for their product.”

The message to suppliers is clearly that they should view Dealz as an opportunity, not a threat. At suppliers’ meetings in the past, executives leading companies such as Kraft and Procter & Gamble have given presentations.

Is now an opportune time to buy Irish sites? Not necessarily, says McCarthy. Good locations are still being bid for and any property that is cheap is probably that price for a reason.

Despite a planning row that is brewing over Euro Giant, a rival that is hoping to open on St Stephen’s Green in Dublin, McCarthy says that the stigma of the single-price retailer does not necessarily stretch to his own business.

There is a Poundland in picturesque Stratford-upon-Avon — Shakespeare country — and one in upmarket Twickenham, near London. “I think people expected plastic buckets on the pavement, but we are a professional retailer.”

As for shopping centres, he says, Poundland is “a footfall magnet”. It might not sit easily alongside Gucci or Prada, but he rhetorically asks how many shopping centres would turn their noses up at a Primark or Penney’s.

Though 85% of customers fall outside the high-income AB category, that proportion is falling. “I think people are getting comfortable with value, and unlike the last recession back in the early 1990s, there is a far greater access to value. How many stores did Primark have in 1990? Now you have Asda [in the UK], Lidl and Aldi.”

And of course, Poundland.

The break-neck pace of expansion is not about to slow any time soon, he says. “There is still plenty of track left.”

The life of Jim McCarthy

Age: 55

Job: chief executive, Poundland

Lives: Stratford-upon-Avon, England

Family: married to Rosie, since he was 18 (met at Dillons newsagents), two grown-up sons

Favourite film: One Flew Over The Cuckoo’s Nest

Current book: Raving Fans by Ken Blanchard and Sheldon Bowles — “my real passion is biographies”

Favourite music: Supertramp

Working day

My commuting time is about an hour. I am not an early starter — I am usually at my desk about 9am. I like to clear a day a week to visit stores and talk to people. It is not always great for my timekeeping, but I like to know what is going on. George Davies said that when you are a retailer you are juggling four or five balls in the air. It’s just a case of making one stick.

Downtime

I like to travel. My other interest would be football, squash, and watching my son, who plays professional rugby for Worcester Warriors second team.

Taken from The Sunday Times on 30/10/11.

Irish Fashion retailer A|wear has been sold to a UK group called Hilco, which specialises in distressed restructurings.

No financial details were released yesterday although Hilco said it would provide A|wear with “extended working capital facilities to facilitate the business’s financial needs”.

A|wear was sold by Brown Thomas in 2007 for a reported €70 million to a consortium comprising UK private equity group Alchemy Partners and management, who took a 20 per cent stake in the business.

The deal was backed with debt provided by Ulster Bank. It was not clear yesterday if Ulster Bank had agreed to write off some or all of this debt as part of the transaction with Hilco.

None of these parties were available for comment yesterday.

Like most retailers in Ireland, A|wear has struggled in the recession. Latest accounts for Maple Topco Ltd, A|wear’s parent company, show revenues declined to €44.8 million in the year to the end of January 2010 from €58.1 million in the previous 12 months.

The company made a loss for the year of €17.8 million compared with a loss of €4.7 million in the previous 12 months.

Maple Topco’s bank borrowings amounted to €34.4 million at the end of that financial year.

A|wear said yesterday that total sales in 2010 reached €48 million.

Hilco’s plans for A|wear were not clear yesterday. Sources suggested the retail business could be sold on quickly by Hilco or even broken up.

This could not be confirmed. Calls to Hilco’s Irish and UK offices were not returned.

Hilco is led by chief executive Paul McGowan, who hails from Northern Ireland. On September 1st, it recruited Larry Howard, a former finance executive with Dunnes Stores, to become managing director of its Irish office.

Mr Howard was involved in a legal action against Dunnes earlier this year in relation to his employment. The matter was settled out of court.

Hilco recently acquired the Canadian business of HMV.

In a statement, Mr McGowan said: “We are delighted to have this opportunity to acquire one of Ireland’s strongest retail brands and look forward to providing operational assistance to A|wear management in the months ahead as the management team seek to address current market conditions in Ireland and develop its overseas markets.”

A|wear began trading in Ireland in the early 1960s and employs about 370 staff. It has 39 stores in Ireland and three in the UK. The company also runs an online store and wholesale businesses.

In a statement, Mark Naughton-Rumbo, joint chief executive of A|wear, said the provision of the working capital was an “important step” for the retailer.

“I would like to thank all of our lenders as well as our investors, for their tremendous efforts in completing this transaction,” he said.

It is understood that A|wear attracted interest from other parties, including Edinburgh Woollen Mill, a high street fashion chain in the UK; and GA Asset Advisors, a specialist restructuring group.

Story by Ciaran Hancock, Business Affairs Correspondent for the Irish Times on Tuesday 19th October 2011 http://www.irishtimes.com/newspaper/finance/2011/1019/1224306073429.html

More than 500 people have applied for up to 35 jobs at a new toy store in Co Donegal. Smyths Toy Store is due to open on November 5th in Letterkenny in time for the Christmas rush.

Interviews for jobs at the store, at the Letterkenny Retail Park, are taking place over the next two days. Smyths spokesman Rob McGuckin said they had been inundated with job applications.

The well-known toyshop chain has another branch across the Border in Derry which is hugely popular with Donegal shoppers.

Letterkenny mayor Gerry McMonagle said the arrival of the shop was a huge endorsement for Letterkenny.

Story taken from Irish Times 22/09/11 – http://www.irishtimes.com/newspaper/ireland/2011/0922/1224304520699.html

Belfast based TDK Commercial Property Consultants are delighted to announce that the UKs leading home furnishing retailer Dunlem Mill have signed up in he new terrace at Riverside Retail Park, Coleraine.

Dunelm Mill will open the 20,000 sq.ft. unit in Autumn 2011 and will create 50 jobs.

Today, there are over 110 Dunelm Mill stores open right across the UK, and the company has a turnover of close to £500million.

Commenting on this significant letting Mark Thallon Retail Partner at letting agents TDK Commercial Property Consultants commented,

“This letting is a significant coup for Coleraine in what is currently a tough property market and demonstrates the landlords determination to deliver quality occupiers onto the Retail Park. This letting creates new jobs for Coleraine during both the construction period and once Dunelm Mill is open and trading

There is no doubt that the landlords with TDKs assistance will continue to work to deliver additional retailers who will be new to the town providing a greater variety of retail offer on Riverside Retail Park and helping to consolidate Coleraines position as one of the premier retail destinations in Northern Ireland.”

RiversideRetail Parkis the dominant retail park in the North of province.  The scheme has a very attractive mix of retailers including B&Q, Pets at Home, Halfords, Carpetright, Argos, McDonalds, B & M Stores, all sitting adjacent to a large Sainsbury Store.

In addition the complex has a great leisure offer which includes a Whitbread Premier Travel Inn and Table Table Restaurant together with a Fitness First Gym centre and a number of other restaurants available to visitors.

For further details contact Mark Thallon 028 90894066  mark.thallon@tdkproperty.com

Belfast based TDK Commercial Property Consultants are delighted to announce that Irelands leading home furnishing retailer HomeStore and More have signed up for 20,000sq ft in the Sligo Retail Park.

Homestore and More will open the 20,000 sq.ft. unit in Autumn 2011 and will create 30 jobs

Today, there are currently 8 trading stores open right across Ireland, and the company has an aggressive expansion programme.

Commenting on this significant letting Mark Thallon Retail Partner at letting agents TDK Commercial Property Consultants commented,

“This letting is a significant coup for Sligo in what is currently a tough property market and demonstrates the landlords determination to deliver quality occupiers onto the Retail Park within the confines of the existing planning consents. This letting creates new jobs for Sligo and I also have no doubt the additional rates generated will be a welcome addition to the Councils income.”

Mr Thallon also revealed that there are several other multi national retailers who wish to open at Sligo Retail Park, because they cannot find suitable sized units with the town centre, but because of resistance from the planners to relax the existing planning consent stores they are unable to secure these tenants.

Mr Thallon commented;

“These retailers have opened in other retail parks in Ireland, however in Sligo, despite no town centre units being available, we have so far been unable to persuade the planners to support this investment.  

There is no doubt that the landlords with TDK and Bogle Estates assistance will continue to work to deliver additional retailers who will be new to the town and offer much needed employment opportunities for Sligo residents whilst maintaining Sligo Retail Parks position as one of the premier schemes in Ireland.”

Sligo Retail Parkis the dominant retail park in the West of Ireland.  The scheme has a very attractive mix of retailers including Homebase, Currys, PC World, Halfords, Carpetright, Cost Plus Sofas and Harry Corry.

In addition the complex has a great catering offer which includes McDonalds KFC and Pizza Hut available to visitors.

The 20th Poundland store in Northern Ireland will open its doors later this month in Erneside Shopping Centre, Enniskillen. The store opening marks a further milestone in the retail giant’s entry into the Northern Ireland retail market as implemented by Belfast based TDK Commercial Property Consultants.

TDKs retail team headed by Mark Thallon have planned and implemented Poundland’s emergence into the NI market with new stores acquired in Strabane, Banbridge, Castle Court, Ann Street, Park Centre, Kennedy Centre and Connswater Belfast, Abbeycentre, Ballymena, Lisburn, Magherafelt, Newtownards, Derry, Cookstown, Dungannon and Portadown.

The latest Poundland store will provide 4,500 sq ft of retail trading space. The store is set to create 30 jobs for the Enniskillen area. In total the 20 Poundland stores in Northern Ireland as secured by TDK, have created employment in excess of 600 jobs.

Commenting on the letting and implementation as a whole, TDK Retail Partner, Mark Thallon said;

‘This exciting new store will add a new level of retail experience to Enniskillen’s prime Shopping Centre. The acquisition of the 20th Poundland store confirms both Poundland’s and TDK’s confidence in the retail market within Northern Ireland at a time when market conditions remain challenging.’

Tim McDonnell, Retail Operations Director at Poundland, said: “Poundland’s first Irish store was opened in Belfast in nearly 2 years ago and has been a huge success in Northern Ireland, In fact, it is forecast to be our most successful region in the UK. Poundland is the first single price retailer in Northern Ireland and the customers seem to love the concept, the brand, the service and the value for money. We really are going from strength to strength in this region and are looking forward to bringing the Poundland experience to Enniskillen.”

Tesco’s plans to build a hypermarket on the outskirts of Banbridge have been put on hold, it has emerged.

The store at The Outlet in Bridgewater Park had been given outline planning permission in March of this year.

However, an appeal by the Northern Ireland Independent Retail Trade Association (NIIRTA) has resulted in the case being granted leave for judicial review, a move which will stall any development.

Banbridge traders have long campaigned against the development, claiming it would turn the town centre into a ghost town.

“NIIRTA brought this case because we have major concerns that this proposed out-of-town hypermarket would remove an estimated £18m from Banbridge Town Centre, resulting in small independent traders closing and the net loss of hundreds of jobs,” Glyn Roberts NIIRTA chief executive said.

“Banbridge has one of the best town centres in Northern Ireland and we are committed to protecting it and ensuring it goes from strength to strength.”

Despite this, Tesco believes it has local support.

“We have popular plans to create hundreds of jobs and to invest millions of pounds in Banbridge and any delay will be extremely disappointing to local people,” it said in a statement.

Meanwhile, a spokesman for Asda said it would scrap its plans for a 25,000 square foot store on the town’s Newry Road if the Tesco development is given the green light.

Philip Bartram, ASDA’s Senior Property Communications Manager, said: “I believe that our proposed plans for Banbridge are a better option for the town and the right decision for Banbridge as any new supermarket must be of an appropriate size, bring real choice to the area, help to improve the overall range of shops and support the town centre.”

Taken from David Elliot’s report in the Belfast Telegraph on Friday 9th September 2011. http://www.belfasttelegraph.co.uk/business/business-news/tescos-plans-for-hypermarket-back-on-shelf-after-appeal-16047384.html

Andy Clarke, CEO of tdk client Asda, wrote the following in the Belfast Telegraph on the 9th August 2011.

Attitude, opportunity and value are crucial in these tough times, says Asda CEO Andy Clarke, who argues the large retail levy is not sensible for Northern Ireland

Shops boarded up, strikes, riot police, demonstrators, confidence plunging, debt rising, the worst economic squeeze in decades. No, it’s not Greece — it’s the UK. As a nation, we face perhaps the greatest economic challenge of my lifetime.

It will test our mettle, but it’s in times like these that countries and individuals discover what they can really achieve, how far they can go, what they are really made of. This is as important at a regional level as it is nationally.

My most testing moment came when I left school — at the age of 16 with one O level.

My prospects weren’t great and although I was brought up with a good attitude to work, I had no real direction.

My first job was cleaning tables and sweeping floors. Then I got a job at Fine Fare stacking shelves and met a man who inspired me to succeed.

His name was Dennis Lever. He believed in me and he helped me develop the skills needed to become a retailer.

Now I’m the chief executive of Asda, but the route I took to get here taught me two lessons. The first is that anything is possible. And the second is that sometimes we all need help to realise our potential.

So that’s what I keep in mind as I look at the chaos on the high street where a raft of big-name retailers are in trouble or closing down: Thorntons, Carpetright, Habitat, T J Hughes, Jane Norman.

Our Asda Income Tracker clearly demonstrates the challenges in Northern Ireland on disposable income. We see this in our stores, with cash and debit transactions on the increase as customers buy now, pay now, rather than buy now pay later.

But we should remind ourselves this isn’t Greece. We’re not hamstrung by the eurozone and we don’t need bailing out. We shouldn’t underestimate that there are still opportunities out there, for individuals, for UK firms of all sizes, and for our country as a whole.

Our economy may be stuttering, but we’re still in better shape than most of our neighbours. Like the old war-time poster said: Keep Calm and Carry On. Unlike the dark days of the 1970s, the traffic lights still work, the buses are running and the bins are being emptied — even if it is once a fortnight for some of us.

But what about retailers, while we’re waiting for better times?

At Asda our monthly income tracker uses official data to provide an unbiased, accurate view of how the average family is coping, once they’ve paid for essentials such as utilities and rent.

In May we saw the biggest fall in family spending power in four years. We found the average UK household had £165 a week of discretionary income, a drop of 8% in 12 months, creating a £14 a week hole in people’s pockets. The latest figures are looking a little better, with the Asda Income Tracker showing UK families had £167 in weekly disposable income available to them — but this is still £9 a week down year-on- year.

In Northern Ireland, however, the news is bleaker still. The region continues to suffer from the lowest household spending power — dropping by 14.8% since last year to just £80 per week — less than half of the UK average.

This won’t be a surprise to the average NI family and it is changing the way they shop. Shoppers are budgeting hard and cutting back. If they don’t need it, they’re not buying it.

Which sets shopkeepers like me a challenge that I relish. Offer consumers genuine value and they still have money to spend.

That challenge is made all the more difficult when politicians take the wrong decisions. Currently the Northern Ireland Executive is consulting on introducing a new tax on large retailers that would raise around £7 million a year.

In my view, it’s the wrong time and the wrong tax. This is the time to pull together and encourage businesses to invest in Northern Ireland and create jobs, not to send a signal that investment is unwelcome. Northern Ireland is already a more expensive market to operate in, and adding to that cost burden when families in Northern Ireland have the lowest level of discretionary income in the UK would be the wrong decision.

Our research also shows only 45% feel their job is secure and almost 60% believe their pay will be frozen this year. Meanwhile, only one person in 20 thinks they’ll get a pay rise this year, down from one in 10 last year.

Which brings me to the other way in which businesses such as Asda can help. By providing fulfilling jobs paying a fair wage and where the only limit on your progress is talent and ambition.

In tough times it’s easy to see investing in your people as an additional ‘cost’ to the business. I’ve never seen it like that.

Recently I was at an event in the North of England that was arranged to help local people who were looking for work. The drive, passion and commitment of the 400 people I met that day was so impressive.

One third of all our new recruits are aged 18 to 24. We are one of only a few retailers in the UK to offer the same rate of pay to under 18s. We do this as a matter of principle. As we know, these are tough times. But we can and will emerge from them stronger than ever.

Read more: http://www.belfasttelegraph.co.uk/business/business-month/out-to-create-blue-skies-16034349.html#ixzz1UoNTyor1

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