Bewley’s has announced plans to invest in a substantial refurbishment and repositioning of its Grafton Street Café in an initiative to secure its long term future on Grafton Street where the Café has a massive rent burden and is currently significantly loss making.
In confirming that it is committed to the future of its Grafton Street Café, Bewley’s said that it must restructure and simplify the Café operation to return it to a sustainable financial position. This will include an extensive refurbishment and restoration to be undertaken at a cost of over €1 million. These works are required to facilitate changes to the Café operations.
Loss making
Bewley’s Grafton Street Café has huge operating costs including an excessive annual rent of €1.5 million which is a legacy of the unsustainable Irish property bubble. It is currently loss making at a rate of approximately €1.2m per annum and would be loss making even with a market reflective rent. This position is not sustainable. The prolonged economic downturn has also had a negative impact on sales levels since 2008.
Simplified focus
As it is currently configured across multiple floors, the Café is complex and expensive to operate and this requires simplification. Bewley’s proposes to start work as soon as possible. Given the extent of the proposed works and the protected status of the premises, it is likely that the Café would need to close for a period of approximately 6 months.
It is planned to re-open the Café with a simplified focus on the ground floor and basement. This reduction in scale will help to reduce costs while the overall restoration will create an enhanced environment for customers. The Café will be repositioned to enhance its appeal to consumer tastes with a focus on high quality handcrafted coffees, speciality teas, baked goods and patisserie. The plans include expanding the craft bakery.
Staff redundancies
Bewley’s regrets that this proposed closure would as a result require proposals for a redundancy programme for the 140 staff at Bewley’s Grafton Street. Bewley’s will enter into consultation with staff to explore ways in which some of the proposed redundancies might be avoided and will support them as much as possible during this process.
Bewley’s Group Chief Executive, John Cahill said:
“We continue to commit our energy and resources into ensuring the protection of this iconic Café which has a special place in the hearts of so many people. We are planning this development in spite of adverse conditions including an excessive rent. We have fought for a market reflective rent in court cases up to and including the Supreme Court where unfortunately we received an adverse ruling.
“Ongoing and major losses are not a viable option for the Café. We have a choice of either permanent closure or investing in a realignment and rejuvenation of the Café. We have chosen to underpin its future sustainability through a restructuring plan involving further investment and improvement.”
“We are confident that this proposed development will ensure the sustainability of Bewley’s Grafton Street and the provision of future employment by the Café on its reopening later in 2015.”
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