Donnybrook Fair breached banking covenants before Musgrave sale
HIGH-END supermarket Donnybrook Fair was in breach of its banking covenants last year, ahead of its sale to Super-Valu brand owner Musgrave.
Sales fell 6.6pc in the year ending January 31, 2018, with the grocer hit by competition in the retail trade, and development works which disrupted footfall at one of its stores, according to newly filed accounts.
Rival supermarkets have been putting increasing emphasis on premium products, with an improving economy meaning Irish shoppers are increasingly willing to splash out on more expensive groceries.
“Although in breach of bank covenants the directors believe they will have the support of the banks for a period of least 12 months from the date of approval of the financial statements,” the accounts, dated July 3, 2018, state.
Its sale to Musgrave was announced in September.
The accounts also state that Joe and Mary Doyle, the business’s former owners, had given personal guarantees of €6.3m in favour of Bank of Ireland, relating to Donnybrook Fair borrowings.
They state that the company was reviewing its store network “with a view to store enhancements”.
“This will allow the business to extend and improve its product offerings within these stores.”
The company has five stores, at Donnybrook, Baggot St, Malahide and Stillorgan in Dublin, and in Greystones in Wicklow.
A store at Dublin’s Grand Canal Square ceased operations after the lease was disposed of, the accounts state, adding that the company sold the property behind the Greystones store and leased it back.