140 jobs to go in Bewley's due to excessive rent

CrazyRabbit

http://www.rte.ie/news/2015/0106/670590-bewleys-grafton-street/

I've never been in the cafe, so can someone please explain how a single cafe can have 140 staff?

The owners are saying that rent is double the market rate (€1.5 million) and that this is the main reason behind these job loses. Personally, I think the rent is excessive.
It's not the first time a shop has been driven out of business due to greedy landlords taking advantage of lax laws on rental agreements. In a local shopping center, all the shops have a 'no decrease' lease, meaning that rent can be increased, but never decreased. So many shops are stuck paying boom-time rents or just have to shut down. I personally know of 3 shops in the center that had to close due to rent costs.

So what do you think? Are business rents too high or is this just poor management by Bewleys (140 staff!!)?

Menas

CrazyRabbit wrote: »

http://www.rte.ie/news/2015/0106/670590-bewleys-grafton-street/

I've never been in the cafe, so can someone please explain how a single cafe can have 140 staff?

The owners are saying that rent is double the market rate (€1.5 million) and that this is the main reason behind these job loses. Personally, I think the rent is excessive.
It's not the first time a shop has been driven out of business due to greedy landlords taking advantage of lax laws on rental agreements. In a local shopping center, all the shops have a 'no decrease' lease, meaning that rent can be increased, but never decreased. So many shops are stuck paying boom-time rents or just have to shut down. I personally know of 3 shops in the center that had to close due to rent costs.

So what do you think? Are business rents too high or is this just poor management by Bewleys (140 staff!!)?

It is a massive cafe...multiple floors and counters. Open all hours. So yes, 140 staff seems reasonable.

The rent thing - I dont know. But what confuses me is that they are saying they need to close for 6 months to do renovations to reduce their floor size.

Does not compute.
1) Wont they still be paying the same rent post renovations?
2) Paying 140 staff redundancy is expensive.
3) Closing with no income for 6 months is a big loss of revenue.

SEPT 23 1989

crippling commercial rates also are a factor in many of these shop closures

Jester252

A little bit of both. 140 staff for one coffee shop is ott and the building is not worth 1.5 million per year

Buona Fortuna

Whilst the rent thing is crazy, I'd be surprised if that was the whole thing.

140 staff at €15k pa is €2.1M so that could be part of it, especially as they are planning to refurbish / downsize.

Daith

Trigger Happy wrote: »

2) Paying 140 staff redundancy is expensive.

They're probably not all entitled to redundancy though?

listermint

Buona Fortuna wrote: »

Whilst the rent thing is crazy, I'd be surprised if that was the whole thing.

140 staff at €15k pa is €2.1M so that could be part of it, especially as they are planning to refurbish / downsize.

Yes but 1.5 Million Per year on Rent. I mean.... come on.

Frigga_92

There is also a theatre upstairs and the cafe opens at 8am until 10pm most nights.

I really like Bewleys cafe, hope this doesn't spell the end of it altogether.

Menas

Jester252 wrote: »

A little bit of both. 140 staff for one coffee shop is ott and the building is not worth 1.5 million per year

140 staff is not OTT though.
They are open 14 hours per day seven days a week. 40 staff per shift and a few more for saturday/sunday busy times. Take in holidays/sickness and you have on average 35 staff working at any given time.
35 staff over three floors, 6 cashpoints, 2 (I think) kitchens....thats not OTT IMO.

Buona Fortuna

listermint wrote: »

Yes but 1.5 Million Per year on Rent. I mean.... come on.

Did I not say it was crazy or did you not read my post before you quoted it?

Falcon L

Staffing level doesn't seem all that high to me. As a previous poster pointed out, they're not all on at the same time. As for the rent... I wouldn't mind being the landlord.

JJayoo

Is 140 the total staff count? or is that just the number they are letting go?

Falcon L

JJayoo wrote: »

Is 140 the total staff count? or is that just the number they are letting go?

I'm sure that's just about the total staff. They'll probably all be let go for the duration of the refurb.

Smiles35

Falcon L wrote: »

I'm sure that's just about the total staff. They'll probably all be let go for the duration of the refurb.

They will. And 70 coming back when they re-open according to the radio this morning.

BeerWolf

Rent is €1.5m a year... what ?!

Bootros Bootros

Rent in Grafton Street is upwards only mostly

AndyBoBandy

Isn't yer man Jonny Ronan the landlord for this building?

he who owes millions to NAMA

Geuze

BeerWolf wrote: »

Rent is €1.5m a year... what ?!

Yes, nearly 29k per week, about 4,100 per day.

The landlord is Ickendel Ltd, which is controlled by Irish property developer Johnny Ronan, whose loans are held by the National Asset Management Agency.

This issue went to court, over an interpretation of UORRs.

http://www.irishtimes.com/business/retail-and-services/new-look-bewley-s-goes-back-to-its-roots-1.2055720

"A third-party arbitrator established a market rent of €728,000 in January 2012. Bewley’s was successful in the High Court but lost on appeal last year in the Supreme Court."

Grayson

Geuze wrote: »

Yes, nearly 29k per week, about 4,100 per day.

The landlord is Ickendel Ltd, which is controlled by Irish property developer Johnny Ronan, whose loans are held by the National Asset Management Agency.

This issue went to court, over an interpretation of UORRs.

http://www.irishtimes.com/business/retail-and-services/new-look-bewley-s-goes-back-to-its-roots-1.2055720

"A third-party arbitrator established a market rent of €728,000 in January 2012. Bewley’s was successful in the High Court but lost on appeal last year in the Supreme Court."

Most of the properties there have an upward only rent agreement.

I'd imagine they're renting per floor so the upper levels will become available for rent. also it's probably two units so it might be half the size when looking at it from the front post renovation.

DeJa VooDoo

listermint wrote: »

Yes but 1.5 Million Per year on Rent. I mean.... come on.

Didn't FG promise to abolish upward only rental agreements?

whisky_galore

DeJa VooDoo wrote: »

Didn't FG promise to abolish upward only rental agreements?

FG promised lots of things.

floggg

listermint wrote: »

Yes but 1.5 Million Per year on Rent. I mean.... come on.

I don't know what conparative rent rates are for properties of that size, but it's a fairly huge building in a prime spot.

Also given that it's always full, I would say they wouldn't be doing all that bad even at that price.

K-9

DeJa VooDoo wrote: »

Didn't FG promise to abolish upward only rental agreements?

I'm not sure, I think they could only bring it in from a certain time frame, not retrospectively.

The thing is, the head of Bewley's was on the radio this morning saying they took a court case and the judge agreed with them on the rent, but they still couldn't get the it reduced. I presume the contract was water tight or something like that.

Muahahaha

DeJa VooDoo wrote: »

Didn't FG promise to abolish upward only rental agreements?

They certainly did. And then they washed their hands of it. In fact I think the guy who owns Korkys Shoes on Grafton Street launched a huge campaign against upwards only rents and in the heat of the 2011 election Enda or some other Fine Gaeler stood on Grafton Street and declared that once in power they would put an end to upward only rent reviews. Wouldn't mind seeing that vid again, it was akin to Ruari Quinns moment when he stood shoulder to shoulder with the students and promised not to hike the registration fees for third level and then within eight weeks of getting into office in the Dept of Education he did exactly what he promised not to do.

DeJa VooDoo

K-9 wrote: »

I'm not sure, I think they could only bring it in from a certain time frame, not retrospectively.

The thing is, the head of Bewley's was on the radio this morning saying they took a court case and the judge agreed with them on the rent, but they still couldn't get the it reduced. I presume the contract was water tight or something like that.

Bewelys should just close down, take their name and trademark with them, and locate somewhere else.
Let the people who own the building board it up or accept the market rent of the day from someone else.

Falcon L

DeJa VooDoo wrote: »

Bewelys should just close down, take their name and trademark with them, and locate somewhere else.
Let the people who own the building board it up or accept the market rent of the day from someone else.

How long have they been at that spot? It must be a very long time.

K-9

DeJa VooDoo wrote: »

Bewelys should just close down, take their name and trademark with them, and locate somewhere else.
Let the people who own the building board it up or accept the market rent of the day from someone else.

Yep, that was suggested to him on the radio and he said they'd considered it.

Falcon L wrote: »

How long have they been at that spot? It must be a very long time.

Probably the big reason they didn't move.

whisky_galore

DeJa VooDoo wrote: »

Bewelys should just close down, take their name and trademark with them, and locate somewhere else.
Let the people who own the building board it up or accept the market rent of the day from someone else.

Yup, and Grafton St can be Anystreet Europe, filled with generic multi national outlets.

Wossack

Falcon L wrote: »

How long have they been at that spot? It must be a very long time.

1927

They closed in 2004, bought out and reopened 2005 by the guys who own Cafe Bar Deli, who also inherited the pretty awful rent agreement. (Rent payable is at last years rate, or current market rate, whichever is higher - or words to that effect).

Height of the boom, 2007, rent doubled from 700k to 1.5m.. and its been that since.

They'd been trying to fight it in court, but it got overturned towards end of 2014, so guess the inevitable had to happen

Highflyer13

Wossack wrote: »

1927

They closed in 2004, bought out and reopened 2005 by the guys who own Cafe Bar Deli, who also inherited the pretty awful rent agreement. (Rent payable is at last years rate, or current market rate, whichever is higher - or words to that effect).

Height of the boom, 2007, rent doubled from 700k to 1.5m.. and its been that since.

They'd been trying to fight it in court, but it got overturned towards end of 2014, so guess the inevitable had to happen

:eek: Jesus thats a ruthless hike, they must have been raking it in to even agree to that.

Mr. Incognito

The facts are that the Rent has an upwards only clause.

The rent was adjusted upwards in line with the lease.

The tenants agreed a rent holiday in the bad times.

When things picked up the landlord wanted his back rent that he said he was owed.

The High Court said that the lease could be interpreted to say that the preceding period meant the initial period.

This was widely seen as bad law and was rightly overturned in the Supreme Court on the Construction of the lease. Preceding period means the last rent review date.

The Supreme Court could sympathise with the High rent but the tenants signed the contract and were, and are bound by it. The court cannot amend stupidity but that's what was agreed at the time by them and they are bound by it.

Now NAMA are the landlords. There is nothing to stop them from agreeing a reduced rent and accepting less and not strictly enforcing the quantum of the lease but there are knock on consequences if they do this as other leaseholders will start screaming that they did it for Bewleys so why cant they have a knock down rent.

NAMA may have sold the loans off- I haven't been following what they have done with their portfolio but a lot of Developers are getting funds to purchase their loans at knock down prices and run the assets for them as all they are concerned about is the return or the yield at the end of the day.

140 staff seems like a lot and personally I will be shocked if they don't go into liquidation as who can afford to pay that level of rent with no income

foggy_lad

Some of the staff could be part time and they should close up and reopen somewhere like O'Connell Street or Talbot St where they will be appreciated even more by shoppers.

Wossack

Highflyer13 wrote: »

:eek: Jesus thats a ruthless hike, they must have been raking it in to even agree to that.

I believe the rate was readjusted every 5 years, so they were half way through a fixed period when they were sold in 2005. I dont think anyone could have envisioned the frenzy that hit at the peak of the boom, so I'd say the 2007 figure shocked both sides of the house

The Bould Rabbit

Bootros Bootros wrote: »

Rent in Grafton Street is upwards only mostly

Same as commercial rents everywhere else then.

foggy_lad wrote: »

Some of the staff could be part time and they should close up and reopen somewhere like O'Connell Street or Talbot St where they will be appreciated even more by shoppers.

Bewleys north of the Liffey. :eek:

This comment from earlier springs to mind -

Trigger Happy wrote: »

Does not compute.

Peist2007

You'd swear someone held a gun to their head the day they signed their lease.

There obviously has not been a recent rent review as same would have led to a reduction to a more market based rent. So, what gives Bewleys?

Specialun

The owner of this gaf

Is he linked to FF or FG

malibu4u

Wossack wrote: »

Height of the boom, 2007, rent doubled from 700k to 1.5m.. and its been that since.

If the country was ran properly 2002 - 2007 property prices and rents would not have risen so much, leading to so much misery - and indeed some suicides - in some peoples lives now - but not in the lives of the fatcats who were running the country. Thank you government, regulator, central bank, banks.

HeidiHeidi

Peist2007 wrote: »

You'd swear someone held a gun to their head the day they signed their lease.

There obviously has not been a recent rent review as same would have led to a reduction to a more market based rent. So, what gives Bewleys?

You clearly don't understand the meaning of UPWARD ONLY rent agreements.

(I'll confess that I couldn't give you chapter and verse on them either, but I do know that they only go one way......)

readytosnap

even at 14 hours a day opening they would need to take €294 an hour just to cover the rent :eek: thems a lot of beans

hoodwinked

Peist2007 wrote: »

You'd swear someone held a gun to their head the day they signed their lease.
?

the location probably was a gun to their head, i'd imagine they were told "if you want to stay on Grafton Street your rent is now X"

i've been in there a few times these past few years, my 5 year old loved it there on trips to the disney store she would insist we stopped for a scone. awful to hear it's closed as the staff were always so lovely to us, especially as we were so awkward standing around in there unsure of if we were to sit and order, or wait to be seated.

DoomZ

It seems high...I know a big hotel in Clare 140 was the staff number

Donkey Oaty

I don't know the legal and commercial ins and outs of this, but Bewley's in a different location will not be Bewley's.

Without wishing to be over-sentimental, there really are issues of national heritage at stake.

King Tut of Egypt, The Duke of Wellington, James Joyce and Bob Geldof, not to mention the Harry Clarke windows - this is more than just a café.

http://bewleys.com/bewleys-grafton-street-cafe/our-heritage

maxwell smart

While I will admit to having a certain fondness for the Bewley's cafe on Grafton street, can we take things into perspective here?

They serve crap coffee, the food is only average and its a rip off.

The 'traditions' of Bewleys in my youth (long time ago) are well and truly long gone since being bought out by Campbell Catering (yes a Catering company, not a food or coffee company).

There is obviously not enough business to keep it going at it's present size and service offering. There are so many coffee shops close by who serve far superior coffee and food.

Would not be surprised to see it reopen as a 'high end' food destination, it has stagnated and been left far far behind.
It is of course a shame that 140 people are being let go but again that is a result of poor management decisions and a lack of investment. If they were tied to that level of rent they needed to drive their prices and service upwards. Just go into the basement of Brown Thomas (Carton Cafe I think its called) and have a soup and coffee for 2 people. €35 and you have to queue to get a seat. The market was there for Bewleys they just didn't look hard enough for it.

Did I say their coffee is crap? Because for a company know for their coffee that is unacceptable!!

Donkey Oaty

maxwell smart wrote: »

While I will admit to having a certain fondness for the Bewley's cafe on Grafton street, can we take things into perspective here?

They serve crap coffee, the food is only average and its a rip off.

The 'traditions' of Bewleys in my youth (long time ago) are well and truly long gone since being bought out by Campbell Catering (yes a Catering company, not a food or coffee company).

Very fair points.

Has anyone made the case for nationalising it, with a café on the ground floor and museum/arts centre stuff on the floors above?

maxwell smart

Donkey Oaty wrote: »

Very fair points.

Has anyone made the case for nationalising it, with a café on the ground floor and museum/arts centre stuff on the floors above?

Sure Nama 'own it'. According to some 'experts' that means its already been nationalised

Seriously though, that sounds like a good idea, worthy of a progressive, inclusive European Capital City. Pity it's located in Dublin so!

26sdrawkcab

26sdrawkcab wrote: »

There is also a theatre upstairs and the cafe opens at 8am until 10pm most nights.

I really like Bewleys cafe, hope this doesn't spell the end of it altogether.

Me too, I really like it

ofcork

Campbell catering are themselves owned by a company called Aramark now who hail from the us.

The Bould Rabbit

Said on the news that only the ground floor will be open after the refurb.

Won't be the same without the first floor when the balcony is open.

thisonetaken

DeJa VooDoo wrote: »

Didn't FG promise to abolish upward only rental agreements?

"Shure that's just something you say at election time" - Pat Rabitte

Pwindedd

bluewolf wrote: »

Me too, I really like it

I've only been once, but the building itself is beautiful and a lovely place for a spot of lunch. I only had a smoked salmon sandwich and a pot of tea and it was lovely, but I can't speak for the coffee.

It would be a shame - 1.5 million is a ridiculous rent. Grafton St may be the place to be in Dublin, but it's not that fecking special. There's shopping streets just like it in many towns all over Europe.

Tony EH

CrazyRabbit wrote: »

http://www.rte.ie/news/2015/0106/670590-bewleys-grafton-street/

I've never been in the cafe, so can someone please explain how a single cafe can have 140 staff?

It's massive.

CrazyRabbit wrote: »

So what do you think? Are business rents too high or is this just poor management by Bewleys (140 staff!!)?

ALL rent is ridiculously high.