Dublin’s Thomas Read Group grew into a chain of more than 20 pubs as the economy boomed in the mid 1990s. After property prices collapsed and drinkers stayed at home, the bars are being sold off.

A receiver, who has the power to sell assets to recover debt, is seeking buyers for nine of Dublin’s most fashionable hostelries.

The bars include Ron Black’s, home to the Champagne Bar during the boom, and the Harbourmaster in the financial district, minutes walk from Citigroup and JPMorgan's offices.

“The sale of the Thomas Read pubs will be an acid test for the market,” said John Ryan, director of hotels and licensed premises sales at CB Richard Ellis Group in Dublin.

In a country famed for its pub culture, the industry is mirroring the rise and fall of Irish fortunes.

Pubs surged in value as the country transformed into one of Europe’s richest countries from among its poorest, with developers snapping up buildings to refurbish and cater to free spending drinkers or convert into apartments.

Property brokers now estimate prices for pubs have sunk as much as 40pc during the recession.

The benchmark ISEQ stock index has lost 48pc over the past 18 months, with pub supplier C&C Group, the maker of Bulmers cider, dropping 37pc.

“At the height of the Celtic Tiger, it was a different process entirely -- there would be full auction rooms with any sort of a decent pub,” said Aidan Heffernan, an auctioneer at Sherry Fitzgerald Group. “The day is fast coming to an end when we would have 15 or 16 pubs in a town.”

Dry market

Heffernan last month sold the Royal Denn pub in Athboy, 64 kilometers northwest of Dublin, for €470,000. Six years ago, the owners rejected a €750,000 offer as too low, he said.

The sale of the Thomas Read pubs and one restaurant will be a better gauge of the collapse of the market, said Ryan. Only one Dublin bar so far was sold publicly this year, he said.

Six changed hands last year, less than 1pc of the total number of pubs, dropping from 4.8pc in 2006 when more people wanted to get into the trade, according to Morrissey’s, the auctioneer handling the sale of Thomas Read.

Bill Morrissey, who is overseeing the sale, told RTE that he received more than 30 “solid” expressions of interest.

Creditors

Thomas Read, which started life as one pub in 1991, sought protection from creditors in November last year. It controlled 13 bars and restaurants in Dublin and another eight bars at Dublin airport, the company said.

After it failed to find an investor, a receiver was appointed in March on behalf of ACC Bank, the Irish arm of Dutch lender Rabobank NV, according to documents lodged at the Companies Registration Office in Dublin. The documents don’t say how much ACC is owed.

The problems for bars are not confined to Ireland. London based Regent Inns, the owner of the Walkabout pub chain, was put into administration on October 20.

In Ireland, sales are tumbling as unemployment edges beyond 12pc and taxes rise. That’s amplifying a trend toward drinking at home, started by a 2004 ban on smoking in public places. Bar takings fell 13pc in August from a year before, according to the Central Statistics Office (CSO).

“The bar trade here is incredibly challenging,” said Andrew Richards, head of the Irish arm of Britvic, which sells fruit juices and sodas to pubs. “People are much more mindful of their spending than in the past.”

Cutting jobs

At least 4,800 pub jobs were cut in the past year, the Vintners Federation said in an August report.

Demand for bars as sites for homes is also evaporating. In 2006, a developer paid about €12m for a north Dublin bar to turn into apartments overlooking Dublin Bay. The site is still idle awaiting work to start.

Three years on, home prices are down 25pc and the government is creating an asset management agency to purge lenders of souring property.

“If they sell and make satisfactory prices, it will be a big boost,” Ryan said of the Thomas Read sale. “The boy meet girl thing is always there, and Irish people like to go out.”

Source: independent.ie