Restaurant and drinks chain Bewley’s is blaming fallout from Ireland’s “property bubble” for the closure of its flagship Dublin café, once frequented by Ireland’s literary elite including James Joyce, Samuel Beckett and Seán O’Casey.
Announcing the “temporary” closure of its Grafton Street premises the company said the site was making significant losses, claimed to be as high as €1.2m a year. All 140 staff members will lose their jobs, but at least 70 will be re-hired when the café reopens in the autumn.
Opened in 1927, the Grafton Street eatery is seen as a Dublin landmark and is Ireland’s longest established and largest café with over one-million customers served each year.
Renovated in 2005 the premises will now undergo a €1m upgrade. “Such a move is necessary as the operation needs to be simplified to create future sustainability in view of continuing rent burden,” Bewley’s said in a statement.
The company — established in Dublin in 1840 as a tea and coffee retailer — stressed it was committed to the future of its Grafton Street café, but said it is necessary to restructure and simplify the operation to return it to a “sustainable financial position”. It claims the site has operating costs and an annual rent of €1.5m — “which is a legacy of the unsustainable Irish property bubble”.
Bewley’s is also blaming a long-running legal wrangle over its Grafton Street rent. The premises closed in November, 2004, for a brief period and reopened the following May after a top-to-bottom regeneration. Its lease was challenged by the landlord, Ickendel, in 2007 claiming the work was carried out to the historic building without landlord consent.
Three years ago an independent arbitrator established the rent should be at €728,000 but, the company claims, it has never been reduced. Despite numerous attempts, including a high profile court case, Ireland’s Supreme Court finally ruled against Bewley’s last July.
“The Café must be brought to a sustainable financial position where it can achieve viability at a market rent,” added the statement. “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.”
The company said it was undertaking the six-month closure to sustain Bewley’s Café’s continuing presence on Grafton Street, and to create related jobs in the future.
“It is deeply regrettable to Bewley’s that the proposed period of closure is likely to result in redundancies for our dedicated Café staff,” added chief executive, John Cahill. “We are also sorry to disrupt our very loyal customers during this period.
“We regret that this proposed closure requires a redundancy programme for the 140 staff, but 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 has previously operated several other cafes in Dublin, all of which have now closed. It also has operations in the United States, in the Boston area under the Rebecca’s Cafe brand and in California as Java City.
