How They Killed Clerys

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Insolvency solicitor Barry Lyons and a graphic used in RTÉ One documentary, Clerys

Last night RTÉ One broadcast an hour-long documentary, by Judy Kelly, about the closure of Clerys last year with the loss of 460 jobs.

It included interviews with former employees, such as Maurice Bracken, who had worked at Clerys for 32 years.

Bracken and the other workers – some of whom worked over 40 years at Clerys – only got the statutory redundancy of two weeks’ pay per year of service.

The documentary highlighted how many of the workers felt the Clerys building on Dublin O’Connell’s street should have been sold in order to offer better redundancies.

But it explained that in 2012, the owners of Clerys, Gordon Brothers, split Clerys into two companies – a trading company, OCS Operations, and a property company, OCS Properties.

OCS Operations paid rent under a lease to OCS Properties for the use of the building. Within two and a half years, OCS Operations, which employed the staff and managed the department store, made a loss of €4.3million.

Meanwhile, OCS Properties – which has no staff – made a profit of €6.5million.

Irish Times business affairs correspondent Mark Paul explained:

The night before Clerys was closed, a group of people assembled and they conducted a transaction that eventually led to you guys losing your jobs the next day. Natrium bought the entire structure of Clerys, so they bought the parent company and that gave them the property company and the trading company and then we know that immediately, immediately upon doing that, they sold the business that was your employer, the trading company, for €1 to Jim Brydie who was an insolvency specialist.”

“Natrium wanted the operating business to be gone from the group, they wanted it to be separated, to be pushed aside and to be left on its own. It was effectively an orphan then, it had no parent company, it had no lease, it had no money and really it had no chance of survival.”

As the trading company’s lease had expired three months previous, Mr Brydie – a former director of Anglo Irish Bank in the UK – wrote to Natrium asking it to extend his lease but they wrote back immediately saying they’d send a formal notice to quit if he didn’t get out of the building.

Mr Paul commented:

“The sequence of events that was laid out to the court, the following morning, was that they all arrived here and then one business was sold and then another business was sold and then there was a board meeting and then there was another meeting with management and each action led to the next action which led to the next action… but if all these things were planned and happened simultaneously, well then, it sort of leads you to the conclusion that maybe all this was pre-ordained. It was never doing to end any other way and, if that’s the case, before any of these meetings happened, Clerys fate was already sealed and when dawn broke, the stage was set for Clerys to be liquidated.”

Mr Bracken, and another former employee, visited insolvency solicitor Barry Lyons to get a greater understanding of what happened.

Mr Lyons had no involvement in the closure of Clerys.

Barry Lyons: “There’s no doubt in my view that it was completely choreographed but at the end of the day, there is a fundamental inevitability about this taking place. The trade is declining, losses are wracking up. Overtime, somebody says, ‘we’ve got to pull the plug’. We’ve got to take a view.

Maurice Bracken: “But there was a property there. And because of some accounting formula, they were able to separate the company from the trading company. They were able to separate this and we’ve all lost.”

Lyons: “I can’t justify that. What they did was clever, you know, they carved it out, the asset out from the trade, and there you go. I mean everyone was operating on the basis that it was a trading company. Everybody knew that a receiver was appointed. Signal number one: that is not a good sign. Ultimately the property from which it traded was worth a lot of money. So what the Gordon brothers, what they did, is they protected their investment by carving out the property. So it’s very easy to demonise them but this country would be in a far worse state had they not come along and they put their money where their mouth is and they said, ‘we think this is going to come good for us’. And so when you do that, you’re entitled to a return on your money. And I think that’s what they got and this is the fallout, what you’ve described, is the fallout from that.”

Bracken: “They did make millions. Ok, we know they made millions. But they certainly didn’t come in here to help the Irish economy, they only really ever had their shareholders in mind. No one else really cared because when they left…”

Lyons: “No, no other company has anyone other than their shareholders in mind…”

Bracken: “But I think there should be some kind of duty of care to the other stakeholders.”

Lyons: “I understand why they did what they did, it makes sense from a commercial point of view and I appreciate that it hurts but, you know, there’s an orderly process that has to be undertaken. There has to be an event that says, ‘this is now over’. That is never going to happen in a nice way.”

Bracken: “Do you actually admire the way they carried out this liquidation?”

Lyons: “Well, from one point of view, it is very cynical. Do I admire it? Well it seems to have gone off without the whole thing spiralling out of control. So, you know, maybe from that point of view, you have to say, well, it was efficient.”

Watch back in full here

87 thoughts on “How They Killed Clerys

    1. Joni2015

      Lol, nice troll.

      These clowns need to get real. Retail has moved on and no shop is going to compete with long term staff. The business was legitimately bust and they got their redundancy payments. Boo hoo you didn’t get the amount you wanted.

      1. ollie

        Joni, spoken like a true blueshirt:

        Jonispeak: Retail has moved on and no shop is going to compete with long term staff.
        Translation: FG plan to drive everyone in retail on to minimum wage and zero hours contracts (except for shareholders)

        Jonispeak:The business was legitimately bust
        Translation: I haven’t seen the books but this statement justifies my previous statement

        Jonispeak:: they got their redundancy payments.
        Translation: They got the minimum they could legally get, paid for by the taxpayer but don’t tell the taxpayer this
        Jonispeak: Boo hoo you didn’t get the amount you wanted.
        Translation: I’m finished trolling, time to go back to being Enda’s lickspittle

        1. Poisson IV

          Except Joni is 100% correct

          Why should citizens financially or otherwise mandate support to a place selling knickers to grannies?

          1. Barry the Hatchet

            Except citizens are already supporting a failed business by paying redundancy to the workers who got shafted, while the Gordon brothers rake in a healthy profit thanks to a nifty accounting trick. Seems somewhat unfair, no?

          2. ollie

            poisson, citizens only began to support Clerys when it closed. All redundancy payments were funded by the state, on top of this there’s retraining, unemployment payments, medical cards, etc.
            So both yourself and Joni are 100% incorrect.

          3. Poisson IV

            Was there some point there Barry? The workers received statutory payments but we should give them more charity – is that your argument?

          4. Barry the Hatchet

            Poisson, I think you are being willfully ignorant. There is no universe in which you could have genuinely interpreted my comment in that way.

            The assets of the company should have been liquidated and the funds used to pay the employees’ contractual redundancy entitlements. Instead, the assets were sneakily stripped out of the company, the State is stuck with the bill for the redundancy payments, and the Gordon Brothers walk away with a hefty profit.

          5. sǝɯǝɯʇɐpɐq

            Barry the Hatchet is 1,000% correct.
            -But ollie was even more correct, and funnier.

            And what about Poisson IV? There’s something very fishy about him / her / it if you ask me. A two-second memory perhaps…I dunno.

        1. Clampers Outside!

          On the blueshirt thing and stuff…. you know when you watch Rebellion on RTE that the Sinn Fein mentioned in the programme has nothing to do with the Sinn Fein of today?

          I don’t support the blueshirts either btw, just wondering where your references of old start and end… so you do know they are two completely different parties, SF of old and SF today?

        2. Poisson IV

          Blah blah blah ” I don’t like you you are blushing blueshirt mommy mommy mommy blueshirt hit me”

  1. Mark Robinson

    What was background to Gordon Bros buying Clery’s? Reason for receivership in 2012?
    Were Gordon Bros available to negotiate for Ireland Inc with troika to seperate bank/Irish interests from bondholders /speculators?

  2. The florist

    You have to feel sorry for the staff, truly shafted, but ask yourself when was the last time you shopped there. last time I was there it was to buy sheets in the January sales and the time before that was the January sales to buy sheets, an old shop with an older clientele, never truly moved with the times…

  3. Jake38

    “The documentary highlighted how many of the workers felt the Clerys building on Dublin O’Connell’s street should have been sold in order to offer better redundancies” Sorry, thats charity, not business.

    “But they certainly didn’t come in here to help the Irish economy, they only really ever had their shareholders in mind.” Yes, thats their statutory obligation.

    I think some more tutorials in the basics of the capitalist system might be required on Broadsheet.

    1. Joni2015

      They bought a bust business and the staff were lucky to get employment for a few more years. They should be grateful for that.

      1. Clampers Outside!

        I hear ya.

        I’m curious though, would they have had better employee rights if it was closed in 2012 and staff were made redundant then….

        I do think The Gordon Bros likely had this all in mind…. but who knows…

  4. Mario Balotelli

    Have to say, I never really understood the sense of entitlement to huge redundancies payments, particularly from low-skilled workers. You get paid while you work somewhere, that’s the deal – redundancy beyond statutory rates is a nonsense to me.

    1. Rob_G

      “Your relative inefficiency has made this enterprise unprofitable – here is a pile of money”.

      (I feel bad for the Clery’s workers, but it’s a strange practice, when you think about it).

      1. scottser

        i would venture that management practices render business inefficient in far more cases than staff.

        1. Jake38

          Presumably you have data to back your latest assertion, or did you just pull it out of your a***.

      2. Anne

        “Your relative inefficiency has made this enterprise unprofitable – here is a pile of money”.
        What was that you were trying to spell earlier on another thread? Something with a U N T. You forgot the C, you cretin.

        What an insult to people who’ve worked hard for 40 + years for a company.

    2. ollie

      Mario, each and every councillor who fails to be re-elected gets a lump sum from the taxpayer, regardless of their means.
      Maybe you could focus your anger towards these low skilled workers.

      1. Mario Balotelli

        Ollie – no anger from me, and two wrongs don’t make a right. Genuinely can’t understand why people, who’ve been paid for their hours of work, expect a bundle of cash when they’re let go. I agree with getting 3 to 6 months pay to keep you afloat while you hunt for another job, but you can’t be expecting hundreds of thousands surely?

  5. DubLoony

    The Clearys workers were treated with utter contempt. The companies were deliberately split to avoid paying them redundancy. Its the only reason it was done.

    1. Frilly Keane

      Of course twas planned from way off
      Even yer man Lyons had to congratulate the slickness of the completion
      And the skills involved

      But that took planning
      And more than a handful of people

      So how da’ûck staff and union reps didn’t smell sum’ting was in air is a sign of ignorance
      Or complicity

      The immediate locking of doors was to prevent pilferage
      Standard Operating Procedure

      1. sǝɯǝɯʇɐpɐq

        The Unions…
        Damned if they do, damned if they don’t…

        Busy sorting out the colour of the toilet paper and then this sith arrives.

  6. nellyb

    Clerys bldg should have been bought by the state and turned into a functional cultural icon.
    It could’ve made a perfect home for arts academy or something like that.
    Off topic – did you see whats built in the place of old Anglo? – Ballymun apartment block.
    Why do architects hate Dublin so much?

    1. Rob_G

      I disagree – O’Connell St is in desperate need of some flagship retail outlets to bring more shoppers to that part of the city, reclaim it from the junkies.

      1. Medium Sized C

        Eh, it’s a literal stones throw from one of the biggest shopping streets in the country…

        1. Rob_G

          … and yet it doesn’t attract many shoppers.

          I can’t remember the last time that I went shopping on O’Connell St; maybe a few good shops in the Clery’s building might change that.

    2. Poisson IV

      Why? Don’t we have enough sinecures for functionaries in so called cultural centres as it is?

    3. ollie

      The anglo building, soon to be central bank, is the worst piece of architecture I’ve seen in a long time.

  7. Eoin

    As much as I am utterly disgusted with how Clerys was used by financial predators to turn a quick buck, the store was making mistakes for years. I used to shop in there religiously when they had Topman. But they lost Topman and replaced it with a load of wacky, high fashion Italian brands I’d never even heard of. Obviously nobody not many others had heard of them either. Bad business is bad business. That’s capitalism for ya (capitalism only applies to the small/ medium guy everyone else gets bailouts). The real disgrace was that an iconic store, at the heart of the capital city, had no idea what it’s customers wanted anymore.

    1. Poisson IV

      Totally agree
      I went in last year to look at men’s suits for a wedding , we were potentially going to buy up to three suits
      The service couldn’t have been worse
      The stock was dreadful
      The whole place reeked of failure
      Good riddance to a failed business

      1. jungleman

        In my innocence I bought a suit there about 5 years ago. It is a stain on my otherwise impressive suit collection!

        They hadn’t a clue what they were at. At least I had the excuse that I wasn’t claiming to know a thing about suits.

        A dinosaur of a department store.

    2. Clampers Outside!

      An odd statement…. no? maybe?

      I wonder, when you (anyone) shop, do you look for ‘brands’ first or do you look at the ‘style and quality’ of product. Your comment above strongly hints that you would look for a brand name first… which I think is kinda weird. It limits ones selection for starters….

  8. uncle festering

    Taxpayer should not have been on the hook for the redundancy payout. If that part is not legally fraud, it should be.

    1. Clampers Outside!

      True, this is an important point. The company, which ever one is responsible should be chased for that cash… but that would require proving that all this was planned.

  9. meadowlark

    I have great sympathy for the Clerys staff, but having been on the receiving end of redundancy and having seen my employer go into receivership, I can say that they have been treated no differently than any other person in their situation. It is not pleasant but it is how these things are done.

    Maybe it will highlight how these things ought to change, to respect the fact that behind each redundancy is a person with a family and friends. But I doubt it.

  10. Joni2015

    The staff themselves are largely responsible for their own downfall. They were the ones that ran the place into the ground. The job for life public sector approach does not work in the business world. Not when your competitor can open up next door with young, hungry and fashionable staff working on half the money. Is a that a good thing? Yes. Otherwise you’re looking at rubbish shops being propped up by the state. Communism essentially. Offer something worthwhile or f**p off. But I’m only a blueshirt scumbag.

  11. SB

    This stroke was a masterclass in how to shaft people – stakeholders and taxpayers alike. I’d say that at this moment, there are dozens of companies being split into separate “Operating” and “Property” companies with a view to taking further action in 6 months. If not already illegal, it should be made so. Surely taking out the funds and then going bust without having left sufficient funds for redundancies is Reckless Trading? Or, as the Golden Circle would probably call it, “a shrewd tax avoidance strategy”

    1. Anne

      +1

      I don’t understand how it’s legal to set up a piece of property as a property company, when you’re not dealing in property and it’s just the one property that you operated a business from?

  12. Andy

    Is the “i” part of PRSI not meant to cover statutory redundancy?

    Shop in “not-making-enough-profit shocker” closes.

    Hope they replace it with something decent. Shame a street like that is such a wasteland.

    1. Spaghetti Hoop

      Last I heard was that they were opening up the Clery rear to face the new Luas line on Marlborough Street and would offer up a mall on the ground floor with several shops / brands and throw in a food court upstairs. But ya know – plans could’ve have changed a couple of times since.

      1. Andy

        Details aren’t really your thing are they.
        Employee & Employer redundancy fund contributions under the original Redundancy Payments Act, 1967 were put in place to cover state funded redundancy payments in the event an employer couldn’t cover the cost of paying employee redundancy payments.

        If the company paid the redundancy to the former employee then the company was rightly entitled to a rebate from the fund as the liability no longer existed and was not called by the company.

        All your link shows is that the government has stopped rebating the paid contributions back to companies who cover the redundancy costs of their former employees even though they have continued making the Redundancy Fund contributions which form a part of PRSI.

        For decades the state has collected redundancy contributions from the employees of Clery’s and their employers and is now having to make good on the states obligation.

        To dumb it down for you a bit more: The state is theoretically now using all the money it took from Clery’s & its employees designated for the Redundancy Fund and using this to pay redundancy to Clery’s employees i.e. it is doing exactly what it is meant to do.

        Why do you use quotation marks for ‘shareholder’? I can confirm, shareholder is in fact a word.

        1. Anne

          “Employee & Employer redundancy fund contributions under the original Redundancy Payments Act, 1967 were put in place to cover state funded redundancy payments in the event an employer couldn’t cover the cost of paying employee redundancy payments. ”

          In the event an employer couldn’t cover the cost OR separated out the property into a separate company in advance of liquidation.. This is what the owners of Clerys have done. It looks like deliberate fraud to me.

          Fraud of the taxpayer. Fraud of the workers.

          Try not to get your knickers in a twist now. It’s clear to all who got shafted what’s gone on.

        2. Anne

          Just came back to this one to see if anyone had anything of value to add besides the night time dipso talking to himself..

          From Andy above – “The state is theoretically now using all the money it took from Clery’s & its employees designated for the Redundancy Fund”

          If more employers did what Clery’s bosses did.. OUR PRSI contributions would have to go up. The taxpayer covered these shysters shenanigans.

          Again, employers are supposed to pick up the tab for redundancy. Zero rebate from the government.
          The state covers it in the event that an employer can’t pay it .. Clerys had the funds prior to separating out the property and paying themselves massive rent.

          I don’t see how this isn’t deliberate siphoning of funds in advance of liquidation.

      2. Anne

        15% in 2012 sorry.

        From January 1st 2013 the employer statutory redundancy rebate was abolished.

        The employer should pick up the tab in full.

  13. Al

    Its hard not to have sympathy for individual staff members but as for the institution, good riddance it was woeful in every respect. Op-Co , Prop-Co is pretty standard business practise globally so no surprise its was used here.
    Clerys was a failing business , that failed, the issue here is that the owners didn’t have the decency to treat the employees with the respect they where due.

    1. sǝɯǝɯʇɐpɐq

      Ohhh…killer…

      You had me nodding along, then tripped yourself up on the second-last word..
      If I had a chair I’d have fallen of it.

  14. sǝɯǝɯʇɐpɐq

    This thread reminds me of a schoolyard joke from years gone by.
    No offense to ex-Clery’s staff, but it went like this;

    Here, y’know Clery’s clock?
    -Hang your I3ollocks on it.

    It was the 70s.
    We weren’t sophisticated.

    1. Liam from Lixnaw

      Are the last two lines part of the joke? Seeing as they too are in italics, I would say, who knows!

      1. sǝɯǝɯʇɐpɐq

        Listen here to me Liam…

        No, come closer, let me put my arm around you…

        What happened was I lost interest in what I was saying halfway through. It happens to the best of us.
        It might never happen to you.

        1. Liam from Lixnaw

          ah righto – actually I think its already happened, I’ve lost interest in what you were saying too.

  15. Anne

    “But it explained that in 2012, the owners of Clerys, Gordon Brothers, split Clerys into two companies – a trading company, OCS Operations, and a property company, OCS Properties.

    OCS Operations paid rent under a lease to OCS Properties for the use of the building. Within two and a half years, OCS Operations, which employed the staff and managed the department store, made a loss of €4.3million.”

    How much rent did they pay themselves I wonder?

    1. sǝɯǝɯʇɐpɐq

      Anne, don’t ask.
      They’ll just think you’re trying to rob their phone / wallet,

      But seriously, welcome to ‘earlier on’, when everyone else copped what has just been revealed to you.

    2. Anne

      Just going on the profits there above of OCS properties of 6.5 million, quite a lot paid to themselves in rent.

      http://www.irishtimes.com/business/retail-and-services/owner-of-clerys-building-made-near-5m-profit-in-18-months-1.2256292

      “Accounts for OCS Properties Ltd, which owns the Clerys building, also indicate that a value of €20.7 million was assigned to the site by its then owners, Boston-based Gordon Brothers, at the beginning of February 2014.

      These accounts are abridged and so only provide certain balance sheet details. No information on its revenue stream is given, but it is likely the only source of income was rent due from the department store.”

      1. Anne

        6.5 million profit…
        “but it is likely the only source of income was rent due from the department store.”

        So Clerys was really a viable business it seems to me.

        Fupping joke.

        1. sǝɯǝɯʇɐpɐq

          @ Anne:
          Did you hear that ‘ɥsooɥʍ’?
          -That was a ‘whoosh’ going backwards.

          Don’t thank me.
          That’s what I’m here for.

  16. Anne

    ust came back to this one to see if anyone had anything of value to add besides the night time dipso talking to himself..

    From Andy above – “The state is theoretically now using all the money it took from Clery’s & its employees designated for the Redundancy Fund”

    If more employers did what Clery’s bosses did.. OUR PRSI contributions would have to go up. The taxpayer covered these shysters shenanigans.

    Again, employers are supposed to pick up the tab for redundancy. Zero rebate from the government.
    The state covers it in the event that an employer can’t pay it .. Clerys had the funds prior to separating out the property and paying themselves massive rent.

    I don’t see how this isn’t deliberate siphoning of funds in advance of liquidation.

  17. Anne

    Seriously, can you just do whatever the fupp you want in this country?

    You don’t pay your TV license, you’re up in court… shaft the taxpayer and hundreds of employees who’ve done up to 40 years service, you walk off with millions.

  18. Anne

    Any company lawyers?
    Anyone at all besides that goon above saying we need to fund Clery’s employees, because Clerys can get away with not bothering their hoop?

    Anyone..

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