BTs and Arnotts to invest €70m in shops and digital by 2024
Department stores to focus on ‘pre-loved’ products in sustainability plan
BROWN Thomas and Arnotts are to invest €70m in the department stores over the next five years, split evenly between their physical shops and digital offerings.
Donald McDonald, managing director of Brown Thomas and Arnotts, said the investment would include a shift to “conscientious consumption”, which will have a focus on the re-sale of second-hand (known as pre-loved in the retail industry) luxury goods.
“By the end of next year, we will be rolling out a significant offering in this area,” he told the Sunday Independent. “This will evolve over the next few years and we are really well-placed to be significant players in this market.
“We are selling these lifetime pieces in the first place. Who better to bring a second life to a product, because we have the credentials in selling them in the first place?
“So we see this as a huge opportunity, in repairing these items as well.”
This will complement the growing proportion of sustainable products being sold by the stores, he said.
According to accounts to be published shortly, turnover was up 1.4pc to €253m for the two businesses.
Turnover for Brown Thomas in the 12 months to February 2019 was €165m, down 0.2pc, but pre-tax profits were up 40pc to €6.7m. At Arnotts, turnover was up to €87.5m from €83.6m, but the Dublin store slipped back into the red with a loss of €1.3m, from a pre-tax profit of €272,000 in the year to February 2018.
McDonald said that this was due to investment costs at Arnotts. He added: “We’re very much going according to plan. In fact, we are way ahead of where we thought we would be — we’re really only three years into this project and we’ve done an awful lot in that three years.”
McDonald said that the group was considering consolidating the accounts.
He said the turnover for the stores was up 4pc when gross concession revenue was included in the figures.
The five-year plan for the stores, which are both owned by the Weston family’s Selfridges Group, is the latest phase of ‘continuous investment’ in the two high profile Irish retail businesses.
McDonald revealed that a food hall is planned for Arnotts in the next two to three years. He said: “We’ve been looking for a long time at a food hall for Arnotts and looking at how we would bring that to life as a really good experience for our customers.
“We don’t want to just do a food hall; we want to do something that is spectacular.”
He said it would be a substantial space at around 8,000 sq ft (743 sq m): “We’ve talked to all the players in the market. We really want it to be something different and live up to the Arnotts brand. So we haven’t made a decision how we want to do it yet.”
It would be a significant investment but will not happen immediately, he added.
McDonald said that the businesses are trading well. “We’re having a good year. It’s been a strong performance and we’ve strong single-digit growth this year. Some areas of our business are working extremely well,” he said.
“Tourism is particularly good and the luxury brands are continuing to perform on the back of that. Menswear is extremely strong, right across Brown Thomas and Arnotts.”
However, like other retailers, there has been some consumer caution creeping in over the past month or so. “The last few weeks, I think there’s a little bit of Brexit in the air,” he said. “But our big, big season is Christmas. We’re very positive and we believe we’re in a very, very good place.”
McDonald said he did not foresee any impact on customers from Brexit.
He added: “There is some ambiguity because nobody knows what the final outcome of Brexit is. But I think we’ve prepared for every scenario and as far as we can make out now, there is going to be no impact on our customers regardless of what way this works, because of the planning that we’ve done.”
McDonald said the company was very much aware of the troubles being experienced by other retailers, particularly on the British high street.
“Their reality is not our reality. The reality for us is that for the last five years, we’ve invested in our stores and our digital offering, and we’ve really invested in customer experience. And our footfall is up.”
Commenting on business performance, Anne Pitcher, managing director of the Selfridges Group, said: “Brown Thomas Arnotts has delivered great results for 2018. Into 2019 and beyond, we will strive to remain at the forefront of experiences as we disrupt and reimagine the world of retail, where sustainability and creativity are at its core.”