Clerys and the vulture culture
YOU have to hand it to Irish capitalism. We might have come late to the party, but we learn quickly. And when it comes to ruthless opportunism and heartless self-aggrandisement, we are up there with the best of them.
The corporate three-card-trickery which saw the venerable Clerys of O’Connell Street close its doors, its employees discarded like scrap, and its concession holders left high and dry, and all at the hands of an Irish corporate vulture, says it all. Five hundred workers went to bed on a Thursday night, blissfully unaware of what was being planned for them. While they slept, their place of work was sold from over their heads; by mid morning Clerys had been passed on to the liquidators, and by Friday evening, the workers were told their jobs were gone, the store was closing. It was the end, full stop.
To go back to the start, Clerys had been bought from the Bank of Ireland out of receivership by Gordon Brothers, a Boston-based investment group, thus displacing the long time owners, the Guiney family. Guineys had lost control because of involvement in property speculation in the Celtic Tiger days, running up debts which proved unsustainable when the crash came.
Gordons paid a reputed €15 million for Clerys, and one of its first actions was to split the business in two - a property company, which owns the building, and an operating company, which ran the business. The full significance of that stroke only became clear on that Friday morning three weeks ago, when Gordons quietly sold on Clerys to an Irish creation called Natrium for €29 million, a neat profit itself in just four years.
Within hours of acquiring Clerys, Natrium sold on the operating arm of the business to a specialist insolvency practitioner in the UK for the sum of one pound sterling (yes, you read right, one pound sterling), which immediately petitioned the High Court on the Friday afternoon to have provisional liquidators appointed. The petition was granted - the law, it seems, can move quickly at times - and the liquidators arrived at O’Connell Street just in time at close of business on Friday to tell the staff and the concession holders that they need not come in on Saturday. Or any other Saturday, for that matter. The store was closing and the workers would get statutory redundancy, and no more.
There were fifty concession holders operating in Clerys at the time of closure - these were self-owned businesses where, each evening, Clerys would clear their tills and then, once a month, would pay back a cheque to the concession holder equal to the amount less a commission fee to cover costs like rent, insurance and security. On the Friday of closure, the concession holders were left as much in the dark as the employees. And as for the customers, the only gesture of engagement was the notice on the front door to declare that vouchers would not be redeemed.
Legally, of course, everything was above board. There was nothing wrong with the procedure which closed Clerys, after 162 years in business, in little more than 162 minutes. Morally - well, what has morality got to do with vulture capitalism?
When Gordon Brothers bought Clerys in 2012, its chief executive, Frank Morton, gravely intoned: “We are acutely conscious of and respectful towards this store’s heritage and tradition.”
Just as well for the Clerys staff that their fate was not left in the hands of an organisation less principled or less caring or less sensitive to its human obligations.
Clerys and the vulture culture