We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
WHEN MANY CLERYS staff turned up to work on Friday they thought they were about to be briefed on the iconic department store’s new ownership to a previously unknown company, Natrium.
Instead, they were greeted with the shock news the 150-year-old store was instead being wound up and they were all jobless – effective immediately.
As workers today took to the streets to protest the sudden closure, TheJournal.ie takes a look at the companies – and the people behind them – that were involved in the deal:
The firms
After much speculation about Clerys fate, Gordon Brothers Europe – the local restructuring arm of the Boston-based Gordon Brothers Group – announced on Friday it had completed the Clerys sale to the Natrium consortium.
That was done through the transfer of the department store’s parent company, OCS Investment Holdings.
According to the last accounts filed for that company, to the start of February last year, it had about €21.2 million of cash at hand, but debts of over €23.6 million due within 12 months.
It also had long-term debts of €20.9 million, which including bank debts of €15.6 million. Those loans were originally to fall due at the end of the year but they were extended by agreement to September 2016.
However the prime real estate site on O’Connell St and the store’s day-to-day operations were tied up in two separate forms - OCS Properties and OCS Operations.
The operations company recorded a loss of over €2 million for the previous 12 months, while the property company booked a profit of just under €5 million.
It was OCS Operations, which was set up in August 2012 when Gordon Brothers took over the business, that was put into liquidation on Friday, spelling the end for the Clerys department-store business and the jobs of the 460 workers based there.
Its last accounts, also to February last year, noted it was sitting on net current assets of over €2 million at the time and the figures were prepared on a “going-concern basis” because of the loan repayment restructure.
This should enable the company to meet its debts as they fall due,” the accounts said.
But the High Court was told on Friday it was unlikely to have enough money to make payments due as early as this week and liquidation was the best option to preserve the value of the business.
As recently as September 2013, Gordon Brothers said it wasn’t considering selling the business, with its European head Frank Morton telling the Irish Independent it was focussed on opening for Christmas after flooding hit the store.
Meanwhile OCS Properties, also set up in August 2012 during the takeover, remains in business.
In February last year it was sitting on total assets of over €20 million. It has been suggested the store could now be turned into anything from a hotel to a luxury mall.
The people
Natrium, a joint venture between the firms D2 Private and funds controlled by London-based Cheyne Capital Management, has yet to file any accounts as it was only incorporated two weeks ago. Cheyne also has offices in New York, Switzerland and Bermuda.
Natrium’s directors are Deirdre Foley, 43, John Skelly, 47, and Ronan Daly, 48, who all have addresses listed in Dublin.
The two men are the directors of a string of other companies including several Cheyne investment funds, while UCD graduate Skelly is also the director of investment firm the Carne group, which has operations in Dublin, London, Luxembourg and the Channel Islands among other locations.
Foley has a long-running history in the Irish property industry including several years with Quinlan Private, the investment vehicle of developer Derek Quinlan.
She left the company before it began to fold under a mountain of debt during the financial crisis.
Quinlan, who left Ireland for Switzerland and then Abu Dhabi, at one stage owed Anglo Irish Bank and other lenders an estimated €3.5 billion through various arms of his empire.
Foley is now the sole owner of D2 Private, which she set up in 2005 with developer David Arnold.
It was also hit during the financial crisis as property prices plunged. The firm and a consortium of investors including former Anglo Irish Bank chairman Sean FitzPatrick lost a reported €72 million on the sale of London’s Woolgate Exchange Building in 2012.
According to D2′s website, Foley has been directly and indirectly involved in property deals worth about £3 billion.
To embed this post, copy the code below on your site
So last year OCS Operations (the tenant) made a loss of €2M, while OCS Properties (the landlord) made a profit of €5M?
But both companies had (until last week) the same owners?
Suggests that the ‘rent’ that they were charging themselves was VASTLY too much. Blatant asset stripping, leaving all those people in the lurch.
How can this be legal?
Because capitalism…
Pure Greed.
It is legal and very easily so and also not going to change.
No matter what regulations are in place there is always a way to do something not expected.
If after all of this they get the same or more rent you know the rent was not too high and Cleary under performed on the site.
If you had gone upstairs in the place you could see under used space and poor value furniture. The business did not move with the times and was a Dodo
In isolation yes but I’m sure there is more to it, hardly a crack case.
The state and the law it enacts has always largely served the interests of capital over those of the majority (labour).
Will you ever get off your backside and put the same effort into working or creating work for others as you put into commenting on the journal Waddler.
@Waddler
We all get your beliefs and normal long winded response. Reality check this practice is not unique to Ireland. I am also pretty sure we signed up to stay within normal international business practices.
If unrealistic socialist process came in there would be a lot less employment here.
Ross the answer is in your question. The operations was running at a loss whereas their other income stream (Rental)made a profit. It makes sense to close the loss making venture. It’s simple economics. For them to keep losing more money year on year would be nonsensical. It’s sad they have lost their jobs but jobs are rarely for life anymore. In the long run most will find work with companies that are more efficient at generating profit/growth, pay their share of tax and add to society again. And for those of you who despise the Capitalism model its exactly this capitalist generated tax income that pays for the Nurses, Gardai , social welfare etc etc. If every company was allowed continue to run at a loss where would the money come to pay all of that?
Kal,
Who claimed these exploitative business practices were unique to Ireland? The majority labour class is being exploited right across the globe.
Capitalism has never created a single job without the expectation of profit. That profit is generated by the workers in the excess value they create over and above their wages. As soon as the profit dissapears, so do the jobs. Capital is doing us, the majority, no favours.
Tim
I comment on my own time and expense unlike yourself a transparent government party hack.
Waddler it sounds like your time rich and cash poor
There are a few areas of potential legal challenge to the arrangements.
SIPTU needs to fund legal advice for the Clery’s workers and a potential legal challenge.
Tim
I have as much as I need. Thanks for your concern though.
Barry,
It’s important to understand where money comes from in the first instance. Modern fiat currency money is not a scarce resource. It is created at will by the institutions public (central banks) and private (commercial banks) that are authorized to do so.
The money has no intrinsic value, is created primarily on computer keyboards and so largely exists as electronic account entries. All financial assets are matched by an equal liability and so cancel each other out and ultimately net to zero. What remains is the real wealth of goods and services primarily produced by the working class through their labour. Financial assets (money) is a claim on that real wealth and therein lies its power.
Government spending creates new money from nothing and puts it into circulation while taxation removes money from circulation and extinguishes it. Taxation is what ‘backs’ the currency. The government imposed tax liability creates a demand for the currency, ensures it is widely accepted and so gives the currency legitimacy. Taxation is also the mechanism by which money can be removed from circulation.
A sovereign currency issuing state like the U.S, U.K., New Zealand etc. does not need to raise tax revenue from private sources in order to spend on its social program such as pensions etc. The government/central bank is the monopoly issuer of their own currency and simply keystrokes the necessary money into existence.
Therefore these nations do not need to tax in order to spend in their own currency. The act of government spending is what actually creates the money which is then later removed from the economy via taxation.
And all thanks to the taxpayer?
Because we may have a curropt legal system.
They should be ashamed of themselves
Why??
Well for one they ran companies into the ground so they are either crooks or thick.
Can we accuse the Guiney family of running their company into the ground? It was in liquidation when it was bought by Gordon Brothers.
It was Gordon Brothers who repaired and reopened the business after the floor. It was Gordon Brothers who operated it since 2012 keeping those working there in jobs too.
Business fail, they fail for a number of reasons and assuming there was no financial impropriety then those who were at the helm when business fail shouldn’t be shamed of themselves at all.
I’m referring to the people who bought it up, it seems to me they have a habit of missing bank repayments aka 3.2 billion.
@Alan they fail alright but workers are the ones who are exploited in the failure. The bare minimum is what they get. Its about fairness.
Wheeler dealers can call the shots and destroy people’s lives such as in this case
If someone has a ‘long history’ in the Irish property business, how are they still able to borrow money and set up companies? who would trust such a person?
They should be lucky to get a job as a traffic cone.
When the lenders themselves are bailed out on making mistakes how can we expect these same lenders to be careful with who they lend?
It is useful to identify the culprits for the maltreatment and exploitation of the Clery’s employees.
The store was over rented by the landlord, as associated company to the operations /trading company. The operations company was sucked dry.
As mentioned in a previous comment, there are a few separate issues here:-
1. The brutal manner of the imposition of redundancy in total disregard of consultation and fair procedures.
2. The blatantly obvious attempt to circumvent the TUPE regulations so as to kill off the accrued employment rights of the employees.
3. The naked opportunism of the acquisition and the preference of capital opportunity over the legitimate interests of labour.
4. The lack of social solidarity with the plight of the employees.
5. The dismal alternative employment prospects of the older employees of Clerys.
6. The legal, but immoral use of corporate structures, so as to leach value out of the operatiosn company and so as to limit/restrict the redundancy benefits to the statutory limits of 2 weeks per year of employment, capped at a mere €600 gross per week.
It is important to note that just because something may be artificially contrived so as to make it technically legal does not make it moral, proper or decent.
The entitlements of the employees, over 400 in number, are being diluted and reduced for the exploitative profit of a few. We have lost our moral values if we think that is socially responsible and moral conduct. It is pure greed and shabby opportunism of the worst kind.
The Clerys employees have been unfairly, immorally and unjustly treated. The maltreatment is indefensible.
This is a textbook example of uncontrolled capitalism at work. This is why employees need strong Trades Union who will fund a legal challenge to the artificial arrangements. The veil of incorporation can be pierced and there needs to be full scrutiny of the following specific arrangements between OCS Properties (the landlord) and OCS Operations.(the operating and trading company). The article identifies that operations company, OCR Operations, recorded a loss of over €2 million for the previous 12 months, while the landlord, OCS Properties, the property company booked a profit of just under €5 million from over renting the premises to the trading/operations company.
The employer was picked clean. This was not just a sudden and quick deal. The basic strategy has been planned and on contemplation for some time.
Do we as a society tolerate this? I don’t regard this corporate strike as remotely decent or acceptable. It’s a matter of basic values.
I love my Country
Why ?
I am sure the work force have asked this many times over however I don’t understand your comment ?
I understand it. Why should the new owners be ashamed? Curious myself what people want to have happened to a loss making business
Keep people in jobs regardless, because capitalism is bad.
so do the shareholders get a payoff just like irbc bank
While I definitely don’t agree with the way it was done or the subsequent complete silence from D2 private, the simple fact is in a free market economy everything is for sale and has a price.
Darach, that is a simplistic and facile view. Different people have different vested rights, sometimes conflicting and deserving of adjudication. There are legally questionable aspects to the transaction. I’m unconvinced that the entire process has been fully legally compliant.
The employees need to take expert legal advice funded by SIPTU. The transactions need to be fully tested in Court.
Yes even dignity can be sold in the free world economy.
Well its time we got rid of the free market economy and vulture capitalism.
Where are the Labor Party when all these companies are screwing their employees and getting away with it. I understand it’s FG policy to protect employers but didn’t think is was Labor’s too
Labour, the political party which does Fine Gael even better than the original does.
Where are all the Irish people when it comes to supporting the workers?
Still shopping in Dunnes and flying Ryanair.
Sad but true.
So you overpay for products/services in the belief that you are protecting workers “rights” Ya of course you do LOL
Clerks was always remarkably good value, well priced, excellent service and a pleasure to shop in. The problem was the use of an exorbitant rent financially to drain the operations/trading company.
What happened was a corporate raid and corporate chicanery of the worst kind.
Their is no excuse as to how the employees were treated . It is called basic human decency. Something that is lost on Ms Foley and other Irish property developers most of whom are rotten to the core and embody all that is sleazy in Irish style Capitalism. They don’t give a damn as long as they make a greasy few quid. Compared to German or even American capitalists they have no honour and are basically as human beings bad people.
Shutting up what’s basically a Dublin landmark and leaving all those workers jobless, and all for the sake of the land it’s on being good real estate… seriously worrying stuff.
have your say