Bono no match for retail slump hitting Dublin's Fifth Avenue

, Bloomberg



Darren McCarthy is learning one thing from Ireland's economic woes: how to be a salesman.

"Before the crash you didn't have to sell," said McCarthy, 31, as he took a break from his job in a fashion store on the corner of Grafton Street in Dublin. "People came in looking for a shirt to wear and left with jeans and a coat too. Now you have to work hard to sell."

For many Dubliners, the thoroughfare is still the heart of the city, equivalent to Fifth Avenue in New York or Oxford Street in London. Each Christmas Eve, crowds gather to hear U2's Bono perform for charity. Yet now the stars have left, the scars of Ireland's crash are starting to show.

Retail sales fell 1 percent in December from a year earlier, the country's statistics office said this week, as falling spending puts a brake on Ireland's economic recovery.

More vacant units are appearing on and around Grafton Street as the area suffers post-Christmas closures. As doormen wearing top-hats usher shoppers into Brown Thomas, a department store selling handbags for as much as $9,440, others, including HMV Group's outlet, are closed.

"There is no question that people are having to make further cuts," said Austin Hughes, chief economist at KBC Bank. "It is progressing further along the food chain. There's an issue for businesses right across the spectrum."

Buying Online

The decline is more pronounced than across the Irish Sea in the U.K. December retail sales in Britain rose 0.3 percent from a year before, with a record proportion of purchases over the Internet. So far in January, HMV, Britain's biggest seller of CDs and DVDs, movie rental chain Blockbuster Entertainment Ltd., and camera seller Jessops all entered administration.

Irish retail sales have fallen by about 20 percent since 2008 as home prices plunged, unemployment almost tripled and the government raised taxes and cut spending to narrow the largest deficit in western Europe.

The fallout is being increasingly felt around Grafton Street, which had so far been immune from the worst of the crash. Since Christmas, the Apollo Gallery, which sold art by Rolling Stones guitarist Ronnie Wood, has closed, along with the landmark HMV store, adding to closures of shoe, clothing and book stores over the past two years.

"It's such a different place now," said David Tee, a teacher in his 40s who returned to Ireland in the 1990s when the economy was growing faster than anywhere else in western Europe. "It's depressing is what it is," Tee said, standing on the street. "It's just so quiet compared to its heyday."

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