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Saturday 10 December 2016

Debenhams paid Roche family over €100m rent for stores in last decade

Debenhams in Dublin
Debenhams in Dublin

Debenhams has paid over €100m in rent to the Roche family over the past decade, documents filed with the High Court reveal.

Nearly €94m of that has been paid in respect of leases on just two outlets - the Debenhams stores on Dublin's Henry Street and Cork's Patrick Street.

It can also be revealed the Roche family firm that receives the rent paid by Debenhams has also had to re- engineer its own finances.

Accounts for that firm, Dooroy, show it had a shareholders deficit of €48m at the end of 2014 - the most recent year for which publicly-available accounts have been lodged with the Companies Office.

It had borrowings of €164.7m with Bank of Ireland at the end of 2014 and the loans are secured by the Henry Street and Patrick Street properties, as well as other assets.

In 2014, Dooroy negotiated a revised facility with the bank, which expires in June 2017.

The Irish arm of Debenhams has gone into examinership, blaming high rents and staff costs here for continuing losses. It's hoping the examinership process will allow it to secure rent and other cost reductions that will make its business here viable.

Acrimonious

The Henry Street and Patrick Street stores have upward only rent review clauses.

In an increasingly acrimonious battle between Debenhams and the Roche family - who sold their Roches Stores business to the British chain in 2006 for €29m - the pair have traded barbs and accused each other of mispresenting facts.

Debenhams group treasurer Mike Hazell told the High Court in an affidavit that the retailer's Irish unit has paid the €94m on the two prime leases to the Roche family since 2006, but also "substantial rent" on five other outlets that have now been sold by the Roches.

Mr Hazell has also said agents for Debenhams did engage with the Roche family regarding a possible reconfiguration of the Henry Street store and strongly refuted allegations by Richard Roche that the retailer showed no interest in progressing talks.

"The proposals were reviewed at length by the company (including a senior management presentation to the company and other group entities)," said Mr Hazell in an affidavit to the High Court.

"It ultimately concluded that the proposals were not commercially viable and not in the best interests of the company."

He also said he rejected entirely "the inappropriate" claim by Mr Roche to the effect that Debenhams had been merely biding its time on the 'deployment' of examinership.

Mr Roche said rent being paid by Zara to Debenhams "goes a long way" to the rent paid by Debenhams on Henry Street.

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