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Bewley’s screwed up, it wasn’t the landlord

Bewley's Cafe

Bewley’s Cafe will close for good, we found out on 06 May and soon the chorus of “greedy landlord” started together with the wish to save Bewley’s cafe.

But as so often there are some facts that are not clearly obvious that need to be considered:

In a starring role, there is developer and landlord Johnny Ronan and the other main actors are the Campbell Family, who own the Bewley’s Cafes and Campbell Catering.

Johnny Ronan is a hugely successful developer, who has his fingers in nearly all relevant property pies in Dublin. He went down in 2008 and was bailed out by NAMA – or rather by all of us Irish tax payers – and he has recovered like Phoenix from the ashes afterwards. Kudos for his regained success, but it is difficult to “like” someone like that who is only able to make his huge personal gains again because we paid his significant debts. And I would also not be surprised if the tag “greedy” might be totally justified.

Johnny Ronan bought Bewley’s Cafe in Grafton Street from Royal Liver a few years ago and is renting it to the Campbell family for allegedly 1.5mio per year. And it is the public’s opinion that it is this massive rent cost that is the reason for the Bewley’s Cafe closure and because we all seem to love the national treasure that Bewley’s Cafe is seen as – although many of us would NEVER go there for their cofe and pastries! – the conclusion is Landlord = Bad, Tenant = Good!

Not exactly the truth, though!

So what is the real picture:

The Bewley’s family started the Bewley’s company in 1840 and they opened the Cafe in Grafton Street in 1927. They bought the building at some point and owned it. Campbell Catering bought struggling Bewley’s at the end of the 1980s and consequently they owned the building in Grafton Street then and that is where the trouble starts.

To get some money into the company, in their wisdom, the Campbell family decided to sell the Grafton St building and lease it back. It is a silly accounting “trick” that gets you cash in the short term, but ignores that you will pay a big rent over the years, especially if the location is such a prime spot in the main city centre shopping area.

In 2007 then there was a rent review and it seems that the Campbell family was ok with 1.5 mio, but the story continues. Just two years before the rent review Bewley’s closed for a while (they seemed to have done this a number of time in the last few years) and during that time allegedly Zara offered a yearly rent of EUR 2 mio. Not sure if they would have been allowed to do that, but Campbell could have continued paying the rent of 1.5 mio to the landlord and on the other side take 2 mio from Zara. BUT Campbell was not interested in that offer.

The landlord even offered them then 6 mio if they got out! But Campbell was still not interested.

In 2014 Bewley’s closed again for renovation and it remained closed for nearly three (!!) years and a whopping 12 mio was spent on the internal works to turn it from a 180 seat cafe to a 500 seat cafe. (I wrote about the challenge back then www.joergsteegmueller.com/2017/11/03/bewleys-cafe-has-re-opened-but-will-it-work/).

So you see that the landlord (Johnny Ronan or his company Ickendel) doesn’t deserve any medals for anything they did, but they also are not really the reason why Campbell is closing the Cafe now. Campbell made a number of decisions over the years that could have helped them to leave the seemingly unmanageable burden behind, but they decided against it.

The final decision now is solely Campbell’s responsibility and there is no justification for a “Save Bewley’s campaign” or anything like that. It is pity that Bewley’s Cafe will close, it was an icon in Dublin and will be missed, but I haven’t been in there for many many years, so I didn’t help to keep it open and therefore I can’t complain. I just hope that no Starbucks will move in! We have more than enough of them! :-O

This article outlines some parts of the story:
www.irishtimes.com/business/commercial-property/row-tied-to-20-year-lease-agreed-when-bewley-s-sold-grafton-street-to-raise-cash-1.1852021

 

(The title picture is licensed under the Creative Commons Attribution 2.0 Generic license and it was taken by Miguel Mendez.)

Less customers in Grafton Street due to LUAS

This is interesting! I had never thought of this or considered it, but after reading an article in the Irish Times about footfall in Grafton Street, I can see how it might make sense. Dublintown, the trader organisation for the City Centre, have identified that there was a drop in footfall by approx. 5.2% and they think the LUAS is the reason.

At first I thought: NONSENSE! The reduction in customer numbers if probably a general and global trend away from retail shops and towards online shopping. The prices retail shops charge are often to hideously high in comparison to online retailers that it really is difficult to keep shopping in the bricks & mortar shops.

But then I thought about how I would use the LUAS (if I could from where I live). If you come from the southern part of Dublin on the Green LUAS line and you work on the North side of the Liffey, then before the Cross City Luas was there, you would have left the LUAS at St. Stephen’s Green and then you would have had to walk from St. Stephen’s Green through Grafton Street to cross the Liffey to get to the Northside. Now, since the Cross City Luas is there, you change Luas trains at St. Stephen’s Green and then go across to the Northside in Luas, without ever putting a foot into Grafton Street.

Not much that can be done about it, but interesting how this new LUAS connection hurts businesses directly but very unintentionally. :-O

Dublin City – Major building site! LUAS and Grafton Street!

You heard that it is expected that the LUAS interconnect building work will begin at some stage this year? And that for a long long time, Stephen’s Green, Dawson Street, Kildare Street, College Green, Westmoreland Street, D’Olier Street, O’Connell Street and Marlborough Street will be dug up/building sites/a mess!? For the LUAS work last time it took YEARS and shops and pubs closed down because customers stayed away.

Now it has announced that the Grafton Street “revamp” will also get underway soon. From July until November 2014 the paving in Grafton Street will be replaced. The (I think) nice red paving will be replaced with grey granite stones. It is a pity, I find, as Grafton Street looks a lot nicer than the new look that will be like Henry Street. The paving in Grafton Street needs some repair, but I am not sure if it will be NICER afterwards. Either way, the impact will be huge! Did you read that? 2014!?!?!?!! Ok, they are taking a break for 8 weeks over Christmas and New Year, but 15 months to re-pave a street???

And the other impressive part: The closures of Dublin Castle, Farmleigh House, the Museum of Modern Art and now Grafton Street de- and re-construction all happen during that oh, so important year for tourism? Inviting people to come to a building site!? You call it “Gathering”! www.dublinpeople.com/article.php?id=2418&l=100

 
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