Shop street Eason to operate as normal after sale

Galway Daily news Shop street Eason to operate as normal after sale

Eason’s Shop street branch will continue to operate without any change after the building is sold.

The iconic building housing the bookstore is one of 13 properties around Ireland being sold by the retail giant to generate revenue for shareholders and to finance the retail business.

But neither the Shop street branch nor any of the retail outlets will see any change in their status after the sales take place over the next two to three years.

One condition of any sale is that the property will be leased back to Eason so it can continue to be used as a bookstore.

The properties being sold are a mixture of buildings housing retail units and investment properties accumulated over time.

David Dilger, Chairman of Eason, said of the planned sales: “These proposals deliver on the Board’s two key priorities of ensuring that Eason’s iconic retail business is financially independent, robust and sustainable in a highly competitive market, and that shareholders have an opportunity to realise value from their investment.”

“The proposals not only provide a significant uplift on previously traded valuations but also deliver liquidity to shareholders not previously available, while retaining ownership in a well-capitalised retail business.”

The total valuation of Eason’s property portfolio is somewhere in the region of €90 million euro, with the result that the Eason Group is “significantly overcapitalised” relative to the needs of its retail business.

Some €20 million in capital created by the sales, and a further €5 million in inter-company loans, will be transferred to a new, financially independent Retail Group.

The remaining €60 million is to be distributed to the company’s 220 odd family and employee shareholders, coming to about €3 a share.

The shareholders would retain full ownership of the retail business after the sales are completed and assets have been transferred to the new retail group.

Plans for this property divestment first began in 2012 to streamline the Eason Group’s corporate structure and separate its retail and property assets.

Liam Henly, Managing Director of Eason, said: “The creation of a stronger, independent retail business is consistent with our strategy in recent years of focusing on our core retail operations.”

He added that the €20 million in new financing would allow Eason to more quickly respond to a rapidly changing retail environment and build on past investments.

“Notwithstanding the many challenges facing the retail sector, we are excited about the future opportunities and look forward to working with our employees, publishers, suppliers and other partners to deliver for our customers and our shareholders,” he concluded.

Other than on Shop street, Eason has Galway branches in Galway Shopping Centre and Tuam.

Eason has 62 stores throughout Ireland, including seven in Norther Ireland, with 34 being operated directly by the company and 28 franchises.

A shareholders meeting to vote on the proposed sales is scheduled for September 21, with a 75% majority vote needed to proceed.