Analysis: Dublin department store Clerys is embarking on its next chapter

The turnaround of Clerys had been going so well.

Following the receivership and acquisition of the famous Dublin department store by retail troubleshooter and investor Gordon Brothers Europe in September 2012, trading was on the up.

But then the roof - or at least part of it - fell in on the recovery when the iconic O’Connell Street store suffered a disastrous flood in July this year. The need for urgent restructuring applied as much to the fabric of the building as to the retail strategy and the race was on to reopen in time for Christmas.

It wasn’t the first time Clerys had faced reconstruction. The store was shelled by the British gunboat Helga when O’Connell Street was bombarded during Ireland’s Easter Rising of 1916. All that remained was the facade of
the building.

Despite having survived such tumult, some wondered whether the July flood would be the end for Clerys. “People were asking how many times can this business come back,” admits Clerys managing director Dominic Prendergast, the department stores veteran installed by Gordon Brothers to revive the business. But in the event, crisis was turned into opportunity.

It was during the late night and early morning of July 24 and 25 that Clerys was deluged. Furniture and beds buyer Steve Domney recalls it well. It had been a stifling, humid day and he had turned in at The Gresham Hotel where he was staying. The heavens opened.

“The rain came teeming down,” remembers Domney. “There was a thunderclap and a flash of lighting. It shook the hotel. Moments later, my phone rang.”

Domney dashed the short distance to the store, where he found the maintenance man and six cleaners with mops and buckets. It soon became clear a much bigger clean-up would be needed.

“I came up the back stairs, and I was splashing in water,” Domney says. “The sight took my breath away.”

Water had gathered on part of the roof, which fell through. A displaced girder set off the sprinkler system and the whole interior was a sodden scene of devastation.

“We wallowed in our sorrows for 24 hours, then we said ‘how do we make the most out of this crisis?’. We went into planning mode,” Prendergast says.

Unwelcome as it was, the flood provided a chance to build on and accelerate the improvement strategy already under way before the disaster. The objective was to create a contemporary department store that built on the strengths of Clerys’ unique position in Irish retail and history.

Every cloud has a silver lining

Prendergast and Clerys commercial director Simon Smith had a clear vision for the business from the day they arrived. Smith says the plan was to give a familiar but under-loved “grand old dame” of retail a contemporary offer and personality.

Improving immediate performance was a priority, and the intention was to widen Clerys’ consumer appeal.

Prendergast says: “I think about what we’d done in the 10 months before the damage. We’d inherited a business that was double-digit negative [sales] and turned it double-digit positive. We put a new trading calendar together - the first thing I did was dispose of the Christmas plan and put in a new one.”

The reasons for Clerys’ problems were basic, he believes: “It had lost touch with the consumer. There wasn’t the value. We earned trust quickly and implemented ideas that [customers] proposed to us.”

Prendergast was anxious not just to reactivate Clerys’ connection to its traditional customer base, but to woo a new generation who were shopping elsewhere with the introduction of new brands and a revamped offer.

“It would be easy to alienate our loyal customers. We didn’t want to do that but we wanted to appeal to their sons, daughters and grandchildren,” he says.

The mix at Clerys is 70:30 concessions and own-bought. Prendergast says the brands Clerys deals with were extremely supportive after the flood and more than 80% have maintained their relationship with the retailer.

But the disaster enabled the arrival of other partners that helped modernise the offer. Carphone Warehouse, for instance, now has a presence in the store, bringing much-needed appeal to the “sons, daughters and grandchildren” Prendergast wants to engage.

Back to the drawing board

It was the same with the design of the 120,000 sq ft, four-floor premises. In-store changes were already under way before the flood to update its look, improve the shopping experience and make the most of relationships with partner brands.

Smith says: “People needed reminding of Clerys’ existence - it needed confidence in its retail skills and the brands needed to be part of what we were doing.”

The flood prompted a store design overhaul. Following the carnage of 1916 the shop was recreated by architect Robert Atkinson - well-known for his earlier work with Selfridges - and Smith wanted to make the most of that.

He says: “On day two we were already talking about what we could do to the building. I felt we had to get it back to its architecture.

“Things had been added layer by layer and nothing had been taken away. That’s where the disaster helped us. All the false ceilings collapsed but not the original architecture. My vision was to complement the architecture with a more contemporary look.”

After the flood there was a frustrating waiting period before any changes could begin. The property took weeks to dry out, and the process could not be rushed as it would risk causing the building to crumble.

In the meantime the Clerys team worked on a marketing campaign in order to make a big impact upon
reopening. The venerable retailer deployed the most up-to-date methods to leverage the rekindled affection for Clerys that the catastrophe unleashed and create a buzz about its reincarnation.

Those two staples of contemporary retailing, social media and the pop-up, were at the heart of the campaign. A pop-up opened around the corner from the store, featuring a ‘memory wall’ on which people pinned messages of support and memories of the retailer. The hashtag #loveClerys was adopted, creating conversations with consumers.

Prendergast says: “We wanted to make sure we were telling customers how we were progressing. It was also an opportunity to increase our following on Twitter and Facebook and to capture data.”

When the store reopened at the end of last month, absence certainly seemed to have made consumers’ hearts grow fonder. The crowds swarmed in and the occasion even made the front page of the Irish Times.

Over the opening weekend footfall was three times higher than during the comparable period last year and sales beat expectations as old customers reacquainted themselves with the store and new ones explored what it had to offer.

A fleet of liveried rickshaws was deployed to ferry shoppers to the store, where aspects of Atkinson’s work such as cornicing, columns and windows had been revealed anew.

From rainfall to footfall

Now Prendergast intends to extend Clerys’ appeal further. He sees a big opportunity to draw in the millions of tourists who visit Dublin every year.

Unlike some of its international counterparts, Clerys had never done much to target visitors from overseas but steps have been taken to change that with, for instance, the creation of an in-store Irish Hall and a Heritage Gallery telling the history of the business and its connection with the big events of the country’s history.

Prendergast says: “We’ve got such a compelling history but the brand has never engaged with tourists. Now we’re doing more links with the airport and the docks, and tying up with bus tours.

“The challenge is to make sure we’re drawing as many people as possible into the city centre rather than them going to the Dundrums of this world,” he adds, referring to the shopping centre on the outskirts of Dublin.

Gordon Brothers Europe chief operating officer Malcolm MacAulay is optimistic about Clerys’ future. He says: “We saw a department store that had real heritage. It had lost its way but we believed we could turn it around.

“We’d been doing that and the numbers spoke for themselves. I think we’ll continue that sales path and the business will continue to grow.”

After a few months that would turn many retailers grey, Prendergast is optimistic that Clerys can now take up where it left off in July.

He hopes that in future he will be able to look back and say: “We put an Irish institution into a good place, we did our bit. The flood wasn’t part of the plan.”