CLINCHTHE DEAL,AND THENEXIT STAGELEFT
Chris Clinch knows timing is everything in business. He’s worked on cash-in-transit, retail and in property – but now he’s focusing on gift cards, writes
Business has caused Chris Clinch plenty of sleepless nights over the years, he says. But not for quite some time. The chairman of The Gift Card Company, which issues the Me2You gift card, strolls into Carluccio’s on Dawson Street with the relaxed air of a man who gets to pick and choose the entries in his diary and leaves plenty of gaps in between.
He makes a smooth entrance and has the knack for a timely exit too – not least the 2018 sale of cash-in-transit business GSLS just before Covid turned the world away from cash. That left him in the enviable position of being able to pick and choose opportunities as they arise. He likes to think his timely departure from both the pressurised world of the cash transit business (and before that, the hectic world of PC sales in Celtic Tiger Ireland just before the crash) were not just cases of blind luck.
“I believe in tight cash control, knowing your business and being in the thick of things,” he says. His CV includes a place on the advisory board of private equity firm Cardinal Capital and a stint on the board of the charity Goal, helping it refocus after a torrid period.
And his decision to take up a role in the gift-card sector in 2021, after a call from former Retail Excellence Ireland (REI) boss and Gift Card Company founder
David Fitzsimons, may be another case of impeccable timing.
REI, along with a number of well-known Irish retailers, had formed a voucher company – and they were looking for a new chairman.
“They reckoned they were on the cusp of bringing it to the next level,” says Clinch. “They wanted someone to help bring a real commercial edge to it.”
He helped refocus the firm onto the corporate market – just in time for the Budget 2023 rise in the Small Benefit Exemption, upping the amount firms can give workers as a tax-free bonus from €500 to €1,000, often on a gift card. That announcement turbocharged the corporate end of the market, as businesses looked to give tax-free Christmas bonuses to staff feeling the pressure from the cost-of-living crisis.
Clinch estimates the current size of the Irish gift-card market is €1bn, with potential to hit €2.5bn. Given the rapid growth of the sector, he believes increased
with a brand new company that was just coming into Ireland – DSG Retail, which owned the Currys and Dixons brands and later bought PC World.”
DSG had just opened its first Irish shop in the Jervis Centre, the former inner-city Dublin hospital that was about to become the beating heart of the consumer boom that would pump cash into the Irish economy.
“Overnight Jervis Street became the biggest shop in the group, by a mile. It was doing phenomenal business. DSG quickly set about opening more Irish stores.”
Clinch came in as financial controller and quite quickly became finance director. He found himself overseeing much of the Irish operations, from finance and HR to distribution.
“We were rolling out shops as quickly as we could,” he recalls.
The timing could not have been better. The public was just waking up to the power of the internet and the potential of owning their own computer.
“Computers at the time sold for two-and-a-half grand. But as the price came down, demand exploded, The first time we sold a computer for less than a grand was a big deal. It suddenly meant ordinary people could have a PC in their home.
“Our biggest problem was finding locations. But when the new retail parks started coming on stream, we went into practically every one of them.”
He worked at DSG for 10 years as it went from just one outlet to a €350m-a-year retail machine.
“I loved it – except for the politics. It’s hard when you’re a subsidiary of an organisation in another country. They asked me to move to Spain and the UK at different stages, but I didn’t want to leave Ireland. I probably got too comfortable in the place.”
So in 2007, despite cash pumping through the tills at a stupendous rate, Clinch was ready for a new challenge. And that was when Plunkett, with her cash-intransit company, came calling.
“She is a superb saleswoman. She came to me and said: ‘Listen, this thing is starting to work, but I need someone who can run the business – the finance side, the operations side.’”
He had, perhaps by chance, moved on just at the right moment from the retailer. That year DSG’s profits had topped €14m. Just months later the financial crash decimated sales of PCs and other gadgets.
“The year after I left, they lost €5m – and didn’t make profits again for nearly eight years.”
Of course, his next exit would be even more impressive. Clinch and Plunkett initially sold a majority stake to Cardinal Carlyle for €30m and ran it with them for three years before selling it entirely to Star Capital in 2018 for a bigger undisclosed sum.
The timing was also just right. Cash, already used less frequently by a generation becoming addicted to digital money, was about to become a dirty word as the pandemic turned the world on its head.
The deal set Clinch up to be able to pick and choose what he would get involved with next.
He continues to work closely with Plunkett on various projects. They are currently working together on residential property with sites in Whitechurch in Rathfarnham and in Foxrock.
“Initially what we did was quite small – but the sites have more potential and we are coming close to the end of a planning permission cycle for 50 apartments and houses at the high end of the market.”
While he is upbeat about the prospects for the development, it has given him a close-up view of a housing development process that is under real strain.
“The planning system is broken. Local planning is now controlled by administrators who have their own motivations – I don’t know what they are, but there doesn’t seem to be rhyme or reason to anything that goes on.
“If you buy zoned land, it should be a situation that you know you’re going to get planning. But you don’t know that in Ireland. That’s not the way it works. The risk all sits with the property developer.”
On one site the local council refused permission, but it was granted on appeal to An Bord Pleanála.
He feels planning for housing could be taken out of the hands of local planners and given to a specialised planning body.
“Why the councils refuse to work with developers, I don’t understand. Because they would get a much better product. What we’re ending up with is a lot of very similar box-type houses being built, which are being forced down the throats of developers who don’t necessarily want this.
“But the only way they can get through everything is to keep building the same things – and they are homogeneous and not particularly nice. I feel we’re going to look back at the housing that’s being built now and say: ‘Who let that happen?’
“The biggest problem is delays. The councils don’t seem to understand that, as a developer, if I go out and buy a site for €2m, well, that money could be sitting there waiting five years for planning permission - or it could be on the stock market earning a return.
“They don’t seem to get this. There’s an attitude that every property developer is a millionaire trying to rob everybody else. That’s built into the Irish psyche.
“Don’t get me wrong, because of GSLS I never have to worry about money in my life. And that’s brilliant. But I’m not greedy or trying to rip anyone off.”
With Irish politics entering a period of potential change, Clinch, as a successful businessman, says he doesn’t suffer from what he calls the “Oh my God, if Sinn Féin gets in, we’ll all have to run away” syndrome.
“Sinn Féin may well bring in a wealth tax. Do I want to pay a wealth tax? No. Does most of Europe pay a wealth tax? Yes. You have to be realistic.
“Irish political parties have a tendency to drift towards the centre, and I think the same will happen to Sinn Féin. I suspect, in 10 years’ time, Sinn Féin will be the Fianna Fáil of old.”
With his interests in retail, property and other sectors besides, Clinch may be relaxed about the future – but he will sit back and watch it all with interest and a seasoned eye for whatever is coming next.