Dáil Éireann debate -
Wednesday, 18 Jun 2003

Vol. 568 No. 6

Written Answers. - Company Closures.

Brendan Howlin

Question:

170 Mr. Howlin asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the implications for small Irish designers of the impending closure of an organisation (details supplied) as a result of a withdrawal of funding by the Irish Craft Council; if, in view of the serious loss for small designers that will result from the closure, she will consider possible measures to ensure the continued operation of the organisation; and if she will make a statement on the matter. [17068/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

Naturally, I am saddened at the closure of DESIGNyard, not only because it means Irish craft workers have lost a benevolent retail outlet also because it means a loss of employment by the staff involved.

The decision to close DESIGNyard was made by its board. The funding of individual companies in the crafts sector is a matter for the Crafts Council of Ireland, and is not one in which I have a direct function. However, the Crafts Council of Ireland has informed me that there was a five-year agreement between it and DESIGNyard on foot of which DESIGNyard received a declining sum per annum. This was factored on the premise that DESIGNyard would become financially viable over the period. The agreement concluded at the end of December 2002.

I am informed that the board of the CCoI received a request from the board of DESIGNyard for an extension of the five-year agreement and that the CCoI board considered this matter in light of an independent report prepared for the DESIGNyard board, and paid for by Enterprise Ireland. The report noted that international comparable models show that the areas in which DESIGNyard operated are more usually served by craft galleries in the private retail sector. In reaching its decision, the board of CCoI was sensitive to the fact that other galleries provide services similar to those of DESIGNyard, and promote and sell Irish craft and design without any State subvention.

The report outlined a number of options, many of which would have involved a major strategic change for DESIGNyard. It was of considerable relevance to the CCoI decision that the option pursued by DESIGNyard's board, following its receipt of the report, was that it continue to deliver its original objectives, without any substantial strategic change, despite the increase in private sector provision for retailing craft in Dublin and the changes in the general market conditions in which Irish craft sales are currently being made.

During most of the term of the agreement between the CCoI and DESIGNyard from 1998 to 2002, the consumer market was expanding. The board concluded that, if the €330,000 received by DESIGNyard in a period of retail expansion had not made its retail activity self-sufficient, a further injection of Exchequer funding in a period of slowdown was highly unlikely to do so. Again, the board would have also been influenced by the appropriateness of using State funding to support a non-profit retailer with direct private sector competitors trading close by. This had not been the position in 1997 when the agreement was established. For these reasons and in the light of the ongoing funding requirements and other council funding priorities, I am informed that the board of CCoI decided that it was not in a position to offer further funding.

In looking at the potential impact of DESIGNyard on Irish craft, the board of CCoI took into consideration that DESIGNyard's 2001 sales of craft and design represented 0.4% of the total sales of Irish craft in that year. The fact that a very significant proportion of annual DESIGNyard turnover was not based on Irish-made craft and design but on sales derived from jewellery supplied by European manufacturers meant that the potential loss to indigenous manufacturers was even less than 0.4%.

In reaching its difficult decision, the board of CCoI fully acknowledged that DESIGNyard has played an important role in developing the contemporary jewellery market in Dublin and also in encouraging commissioned work in a broad range of craft-based media. The council is particularly disappointed at the loss to Ireland of one of Europe's leading contemporary jewellery galleries. The Irish consumer was able to benchmark the standards of Irish design against its European counterpart and be reassured that they were not found wanting.

It is the council's hope that the private sector will now rise to the challenge and replicate such a gallery on a similar commercial footing as is found in other European capital cities.