Deputy Joe Doyle has been given permission to raise on the adjournment the question of the proposed sale of the Switzer Group. Deputy Doyle has ten minutes.
Adjournment Debate. - Switzer Group Proposed Sale.
I am deeply indebted to the Ceann Comhairle for his kindness in allowing me to raise this matter of public concern and importance on the Adjournment this evening.
The Switzer group which consists of Switzers in Dublin, Cashs in Cork, Todds in Limerick and Moons in Galway have a long and proud trading tradition as departmental stores. The Switzers which you, a Leas-Cheann Comhairle, and I are more familiar with is situated in Grafton Street. It is a landmark in the city of Dublin where customers can shop in a most relaxed atmosphere, select from a wide range of goods and enjoy the attention of well trained and courteous staff.
When the House of Fraser indicated their desire to sell the Switzer group earlier this year it initially sent a shock wave throughout the retailing community, especially among the staff of the Switzer group, because it was not clear at that time what the future of Switzers would be. This anxiety was abated by a press statement which was issued on behalf of the House of Fraser who were negotiating the sale of the Switzer group to Ewart plc. of Belfast. The press release stated:
It is the intention of Ewart plc, to continue to run Switzers as a departmental group store while looking to develop the potential of the group, including extending its retail activities in the existing stores, and establishing other retail outlets both in Dublin and in other cities and towns in Ireland.
The statement went on to say: "The terms and conditions of the sale are to remain confidential between the parties but Ewart plc, has given assurances to the House of Fraser that employment and the terms and conditions of employment will be maintained". That statement was received very well by the public and especially by the staff of Switzers because it was clear from it that in future Switzers would be maintained as a retail department store and the terms and employment of the staff were certainly secured.
Unfortunately this situation has deteriorated over the past number of weeks. Speculation in the media and in the property columns of the daily newspapers have indicated that Ewart plc. had other intentions for the Switzer group. Switzers are now facing the prospect of a breakup and huge redundancies. The first indication of this came in an interview with Mr. John McElroy, the chairman and chief executive of Ewart plc., which was published in Ulster Business in November 1989. I quote from pages 27 and 28 of that article:
The price of the Switzer group which comprises the Dublin Store, Cashs in Cork, Todds in Limerick and Moons in Galway remains confidential but is reported to be around £30 million, £18 million to cover the debts of the Group and some £12 million up front. The attraction says the Ewart chairman and chief executive, Mr. John McElroy, is not the stores themselves — they have been losing money steadily for years — but the prime sites they occupy in the Republic's four major cities. Their aim will be to make better use of the sites occupied by the stores which he described as a very solid property asset. He said they will be looking for retailing expertise and will try to make some clever use of the buildings. This will probably mean reducing the amount of each stores interior space and the extending of its frontage and the using of the space thus released for the introduction of a new sales unit.
In last week's Sunday Tribune there was an article entitled “1,000 Jobs at Risk in Switzer Group Overhaul”. In the article it was stated that Switzers now faced the prospect of a breakup and huge redundancies if a suitable developer could not be found and it was claimed that one property developer confirmed that he had been asked to join Ewart plc. in a joint venture involving the closure and redevelopment of the store but he refused on the grounds that public reaction would be hostile.
We can clearly understand the feelings of the staff in the Switzer group to the statement made by the Ewart chief executive and the articles published in the media in recent weeks. The managing director of Ewart plc., Mr. J.K. Kennedy, wrote to Mr. Hugh Pollock, general secretary of the Irish Distributative and Administrative Trade Union, on 4 October 1989. He stated in his letter:
That you for your letter dated 25th September 89. As indicated in that statement——
That is the statement I referred to earlier.
——Ewart plc. is at this point still in negotiations with the House of Fraser and should the present discussions lead to an acquisition we envisage a positive future for the Switzer Group. In the event of our acquiring Switzers we would wish to have a positive and open relationship with the staff and their trade union representatives and would envisage meeting you at an early date following the acquisition.
On a number of occasions since then the staff of Switzers, through their unions, have sought meetings with Ewart plc. regarding the future of their members but for some unknown reason, a reason best known to Ewarts, these meetings have been cancelled at very short notice.
I think I have explained quite clearly to the House the anxieties which have been expressed by the employees of Switzers both as a result of the press speculation and the unavailability of Ewart plc. to meet with the trade unions involved. My main purpose in raising this matter on the Adjournment this evening is to ask the Minister for Industry and Commerce not to approve this take-over — which he has the power to do under the Mergers, Take-Overs and Monopolies (Control) Act, 1978, as amended — unless Ewart plc. can give a copperfastened undertaking that they will honour the settlements stated in their press release, to which I have just referred, and give a guarantee in regard to the future employment of the staff of Switzers.
I am sure we can anticipate that the House will agree to give Deputy M. Higgins two minutes. Is that agreed? Agreed.
I had an opportunity yesterday to meet some of the employees of the Switzer Group. I compliment Deputy Doyle on his contribution and I would like to support what he said. He has given a very fair and succinct summary of what is happening. There have been two occasions at least when the union were in reasonable expectation of having a meeting. Both were cancelled. There are 1,000 imployees at the different stores. What is staring us in the face is another possible example of asset stripping. I am not saying that about the present deal but I believe the workers are entitled to information. This highlights something very important. The workers sought information on their future livelihood. A great many people have spent a long number of years working in these stores, and some of the stores were taken over before. The workers sought the information in an orderly way through their trade union and the meetings did not take place. All the workers wanted to know was what was happening to the Switzer Group and whether they would have their jobs. They are very vulnerable.
In relation to the elimination of the debts of the group as they stand now, it is very clear that anyone who was interested in the acquisition purely from the point of view of the value of the assets could realise them without giving any commitment to the labour force. I join with Deputy Doyle in strongly emphasising the importance not only of this case, but of the need for legislation. Some time ago in the retail section 1,200 people lost their jobs, and the assets of the retail group were recombined in a different way to the great benefit of people who were involved in a purely speculative activity. By and large the jobs were replaced by a large proportion of temporary jobs which are not protected by any of the usual labour legislation. I join with Deputy Doyle in urging the Minister to seek to investigate deals like these in the short term so as to give some prospect of hope and security to the workers involved.
I am aware of the proposed takeover of the Switzer Group, and I would like to inform the House that my Department have already received a notification to this effect under the Mergers, Take-overs and Monopolies (Control) Act, 1978. The notification involves a proposal whereby Ewart plc proposes acquiring from Switzer Holdings Limited the entire issued share capital of Switzer and Company Limited. Switzer Holdings is a wholly owned subsidiary of Harrods (Ireland), which, in turn, is a wholly owned subsidiary of the House of Fraser plc group which is incorporated in Scotland. Ewart is incorporated in Northern Ireland and its core activities are property investment and development.
As Ewart's main activity is in the property and investment area, its approach to the proposed Switzer Group takeover is to enter into a joint venture arrangement with a retail partner which will be involved in the day to day running of the group's departmental stores.
The Switzer Group as everyone knows, is one of Ireland's most prestigious retailers of fashion and homeware, employing approximately 800 people at its four department stores consisting of Switzers—Dublin, Cashs—Cork, Todds—Limerick and Moons—Galway.
There has been a lot of speculation about the future of the Switzer Group so that it does not come as any great surprise that it should now become the target of a takeover proposal by some outside interest who would see it as a good investment opportunity and as creating the conditions for its further development. In this regard the Minister will be looking closely at the proposed partnership arrangements and I have no doubt that he intends being absolutely satisfied regarding the credentials and potential of this partnership for the future success of the Switzer Group and its employees.
The Minister is aware of the concerns expressed by the Irish Distributive and Administrative Trade Union and the employees regarding the future job prospects under the proposed takeover, and I want to assure them and this House that he will be paying particular attention to this aspect of the takeover, as he is empowered to do under the Mergers, Takeovers and Monopolies (Control) Act. The Minister will, of course, also be taking into consideration other matters such as the likely effects of the proposed takeover in relation to competition, national policy for regional development, shareholders and partners, interests of employees and of the consumer, when taking a final decision under the Act as to how the proposed takeover would operate in relation to the common good.
The proposal is currently being considered at official level in the Department and I do not wish to go into any further detail at this stage. Additional information relating to the proposed take-over has only just come to hand and this is being examined.
However, I would like to emphasise that the proposed takeover is subject to a decision by the Minister under the Act which provides that any merger or take-over falling within the scope of the Act cannot be concluded until the Minister for Industry and Commerce has stated that he does not propose to prohibit it either absolutely or conditionally, or in the absence of such a statement until a period of three months has elapsed from the date of notification, or from the date of receipt of such further information as the Minister may require. The Minister does not intend that this takeover should be allowed to proceed without taking a decision, and he intends that every effort will be made to enable such a decision to be taken quickly in the interests of both the group and its employees.
The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 21 November 1989.