Arnotts’ banks have drafted in a team of specialists including former Brown Thomas chief executive Nigel Blow to assist its management team with formulating a strategy for the troubled Irish department store.
Blow has been parachuted into the retailer by Anglo Irish Bank and Ulster Bank following the completion of a repackaging of its €260m (£237.2m) debt pile in January.
Arnotts has renegotiated its debt repayment schedule. Its loans were due to be repaid next month, but its banks agreed to postpone repayments until 2013, providing the business with breathing space to assess its future.
Blow forms part of a team put together by US-based investment and restructuring specialist Palladin Capital.
Caryn Lerner, former chief executive of Canadian department store chain Holt Renfrew, has also been drafted in as an adviser. Blow and Lerner join Palladin chief executive Mark Schwartz and Tobias Nanda - a former investment partner at GB Merchant Partners, the investment arm of US restructuring firm Gordon Brothers Group - as consultants at the business. The group is not thought to be planning an acquisition of the store.
The team is working with Arnotts chief executive David Riddiford and the existing management team to identify the future direction of and growth opportunities for the Irish business, which is one of the most recognisable retail names in the Republic of Ireland.
Arnotts marketing director Jayne O’Keeffe said: “It is standard practice for the banks to explore further opportunities for growth and to support the future direction of the business.”
Last month, Arnotts spent €2m (£1.8m) exiting a costly lease on its second temporary store in Dublin’s Jervis Shopping Centre, metres away from its landmark Henry Street store.
It followed the announcement that shareholder Boundary Capital had declared its 28% stake in Arnotts worthless because of its level of debt.
The Jervis Shopping Centre store was part of an ill-fated move by Arnotts to buy up property for a €900m (£821.2m) investment to redevelop Dublin’s Northern Quarter spearheaded by the department store and first announced in 2006. The project was mothballed after the retail sector in Ireland was hit by a severe recession and crumbling consumer confidence.
Arnotts, which is 55% owned by group chairman Richard Nesbitt and his family, made a €29.6m (£27m) operating loss in its last filed accounts.