THE decision to close Instore’s Ellen Street store on Christmas Eve was taken due to a “collapse of retail around that part of the city”, creditors’ meetings heard this week.
Five companies behind the furniture retailer were placed into liquidation this week after the meetings, which were held in the Castle Oaks Hotel on Monday. Co-founder Oliver Moloney, Ennis Road, addressed the meetings personally and gave an account of Instore’s history and reasons for its collapse.
The principal reasons for its demise were held as being “high rents, a collapse of the retail trade and bank borrowings”.
Speaking about the Ellen Street flagship store, he pointed to “the closure of Patrick Street and failure to develop it, and the fact that there was no footfall down there”.
“Retail collapsed in that area of the city,” he told creditors, of which there were very few in attendance.
A company spokesperson spoke highly of how Mr Moloney had run the company over its 25-year history that its collapse was not leaving behind a long list of creditors or large debt, and described the meetings as being held “without incident”.
“Revenue were in attendance at all of them and there was only one other creditor present at each of the meetings,” said the spokesperson.
“All of the meetings were held in an amicable fashion where Oliver Moloney was the director present and he gave a full and frank account of the history of the company, its background and how it got to where it is today.”
“From 2008 there was a continuous decline in turnover because the retail sector was so badly hit.”
Liquidator Paul McSweeney was appointed to the companies behind Instore, most notably Instore Distribution Ltd, the main arm of the group, which recorded losses of €1.7 million in the 12 months to the end of February 2009.
Instore once had 140 staff in seven stores around Ireland, but the final two stores, in City East on Limerick’s Ballysimon Road and in Galway, closed within seven days of each other in January.
Mr Moloney’s personal liability is described as “substantial” and is believed to be in the order of seven figures. He is understood to have provided personal guarantees on bank loans made to Instore.
“The real level of debt arises to the directors. The creditors are owed very little money in the overall context,” added the spokesperson.
The final closures affected about 14 staff. The spokesperson said staff had been “paid in full” and would receive statutory redundancy.