Arnotts chairman leads board reshuffle

Mark Schwartz, chief executive of Palladin Capital Group - the group of specialists drafted in to formulate a restructuring of the business in February – was appointed chairman by state-owned Anglo Irish Bank and Ulster Bank who were granted permission to takeover the debt-laden department store by the European Union Competition Commission on Monday.

Schwartz implemented a board reshuffle yesterday and has begun a review of the company’s top tier management team, thought to include Arnotts chief executive David Riddiford. Riddiford remained chief executive of this business today.

Confirmed changes include outgoing chairman Richard Nesbitt, who will stay on as non-executive director in recognition of the Nesbitt family’s contribution to Arnotts’ heritage and history.

Non-executive directors Keith Edelman and Michael Nesbitt have resigned as a result of the changes. They will be replaced by Tobias Nanda, also a director of Palladin, and Stephen Haughey, a former chairman of A&L Goodbody Solicitors.

Schwarz said he had negotiated with Anglo Irish Bank and Ulster Bank for a new working capital facility, although declined to reveal itsvalue. However he stressed that the banks were fully supportive of the business and that the facility would enable him to finance growth, bring in new brands and increase capex spend. “We have the financial support we need.”

He added: “In the short to medium term the banks want to focus on running the core retail business. We don’t need new investment now.Further down the line we may look to float or look for new investors or refinance.”

Separately Schwarz said that sales were up in the high single digits and that margins had improved. He confirmed that the store was “very profitable, both from an earnings and cashflow point of view”.

He added: “The [Irish] economy is still difficult and consumers are very cautious but we have seen a positive result in trading which is partly a reflection of how we have been managing the store.”