Designer don Donald McDonald is no fashion victim

It will feature the latest retail technology such as a virtual make-up try-on system and a service where shoppers can digitally hand-pick items that will be ready and waiting for fitting when the customer arrives at the store. The shop will include its own broadcast studio and events space, and have “lots of space for pop-ups” for local businesses.

There will be a big focus on community and sustainability, McDonald says, and “a magnificent restaurant, operated by Domini and Peaches Kemp, based around Irish produce”.

The store will employ 380 staff, including 60 employees from BT2, the smaller, convenience-style Brown Thomas outlet trading at Dundrum. BT2 will close when the new store opens in February next year. Of the new jobs, about 180 will be full-time and permanent. “We are thinking of it as next-generation Brown Thomas,” McDonald says.

It’s refreshing to hear a retailer talk so positively about the future. Amid the pervasive gloom that hung over the sector during the past 17 months there was a prevailing wisdom that Covid-19 was accelerating the shift of shopping online and heralding the demise of physical retail. McDonald is having none of it. Nor it seems are the interested parties in Selfridges, Brown Thomas Arnotts’s parent, which has been on sale for up to £4 billion (€4.7 billion). The Dublin boss is keeping schtum on the sale process.

“All our luxury brands are reinvesting in our [Grafton Street shopping] hall,” he says. “It will be completely transformed over the next 12 months.” Gucci is opening a new boutique, as are Bottega Veneta and Prada. Saint Laurent opened a new store last week while Louis Vuitton will be expanding its space next year.

After three years of courtship French fashion royalty Dior will open early next year. “That demonstrates not just confidence in Brown Thomas but also Dublin as a destination, and physical retail.”

While McDonald is not playing down the challenges of the pandemic, it has been, in a curious way, a validation. The group was forced to close its seven stores for 22 of the 52 weeks of the financial year to last February and make 150 staff redundant. In early March last year, before the announcement of any wage supports, it committed to paying staff 100 per cent of their pay.

A saving grace was that the lockdowns arrived in the middle of a €70 million investment programme, which included an overhaul of the Arnotts and Brown Thomas digital operations. The group quickly scaled up to serving customers online, with about half of all orders fulfilled from the closed shops.

As a result, online sales last year rose between 350 and 400 per cent. The proportion of customers who shopped both online and in store more than doubled to 22 per cent. According to McDonald, these “omnichannel” shoppers are the biggest spenders online and in store. There was a Brown Thomas twist to online: personal shoppers were dispatched in electric cars, delivering a range of couture to customers for private home fittings, and waited for returns. A fitting room in your sitting room? “Exactly,” McDonald says.

When the stores reopened, customers flocked back. In the past two summers trading levels went straight back to pre-Covid 2019 levels. Most impressively, last Christmas the group had its busiest 24 days of trading yet, both online and in stores. “That gave us all the reassurance we needed that we were doing the right thing,” McDonald says.

A dapper Dubliner, McDonald was born into the rag trade. His father owned Moore Lane Fashions, a manufacturer of ladies’ clothing that employed 150 staff in a factory off Moore Street in the city centre. His first working memories involve “rolling the rails” into shops across the city. At 15 he got a part-time job with Awear, the main-street fashion chain then backed by Brown Thomas.

As a raw 16-year-old he remembers meeting Galen Weston, the Brown Thomas and Arnotts owner. “He was an inspirational figure,” McDonald says of Weston, who died in April this year.

After leaving Ardscoil Ris on Griffith Avenue, McDonald studied accountancy at Dublin Business School. He kept his job at Awear, however, and after finishing his studies became a trainee manager, then a buyer. At Awear he fell under the tutelage of Paul Kelly, later to become Brown Thomas managing director and now chief executive of Selfridges.

Kelly is “one of the greatest retailers we have ever had in this country”, McDonald says of his boss, and “a brilliant leader”. At 23, McDonald was inspired enough to leave Awear and set up his own business, Magnum Clothing Group. It became a significant force in the Irish fashion trade, as a wholesaler and retailer. The group built up NoName, a nationwide chain of 18 fast-fashion boutiques.

Like a plethora of other retailers, local and international, NoName got swept away in the economic landslide that followed the great financial recession. Magnum had been in business for 22 years, an epoch in the trade. “There were plenty of ups and downs, but far more ups than downs. It was a great experience.”

In 2010 he set up the online fashion business theshowroom.ie, which he admits was “a bit before its time”, and began doing retail consultancy. When Selfridges sized up a bid for Arnotts, then in Nama, with Noel Smyth’s Fitzwilliam Real Estate, Kelly picked up the phone.

Once the deal was completed McDonald became Arnotts chief executive. He describes Arnotts as a lifestyle brand, catering for “all stages and aspects of life”. It’s the shop where customers who were kitted out in school uniforms come back to kit out their own children. His immediate focus was to preserve that identity, while making the store more contemporary, he says.

There was a big integration job to be done too, alongside Brown Thomas’s then boss Stephen Sealy. Selfridges wanted two brands within one company. McDonald says the Weston family were keen to ensure staff knew there was no favoured brand in Ireland.

“There were two cultures [in Brown Thomas and Arnotts]; we needed to bring them together,” he says. “At the very early stages there was resistance among Arnotts staff to the thought of being Brown Thomas-ised.” There would be one HR department, one IT department, one buying department, one IT and payroll system. When Sealy retired in early 2019 there would be one chief executive.

In describing the stores’ characters, he likes an analogy with restaurants: Brown Thomas is three-Michelin-star cuisine while Arnotts is top-end yet less formal.

“People dress up to shop in Brown Thomas,” McDonald says. Yet customers shop in both stores, he adds, and the aim is the same: delivering the best brands and best customer experience.

Its service benchmarks, he says, are international. It is also “constantly out there looking for the latest brand”, McDonald adds. “Often our buyers are convincing brands that Ireland is a place to be.”

Brown Thomas landed Maria Tash, a New York fine jewellery and luxury piercing brand, ahead of most other European cities, aside from only Rome and London. Arnotts coaxed a wary FAO Schwarz from New York, only for the toy retailer to enjoy its busiest opening here. It was a boon for Arnotts too. Between October and December 2019, FAO Schwarz was believed to be responsible for 500,000 additional visits to the Henry Street store.

McDonald has no fears that the Dundrum store will drag traditional Brown Thomas shoppers from the city centre. It will grow the market, not split it, he says. The Dublin store’s shopping area, at 110,000 sq ft, is more than twice the Dundrum store’s. He says there is a compelling business case for the new store.

The Dundrum store will be more vocal about the retailer’s sustainability credentials. From the end of this year the group will stop stocking products made from exotic skins — so no more Gucci snakeskin handbags. By 2025 suppliers to Brown Thomas and Arnotts who use cotton, leather or palm oil in their products will have to prove they buy from certified sustainable sources. Plastic microbeads are banned from its cosmetics.

On a different ecological tack the retailer found itself in the middle of a conflict between Dublin city council’s pedestrianisation plans and the owner of the car park behind its Grafton Street store. It was suggested that the retailer do more to encourage shoppers to ditch their four-wheel drives. “Brown Thomas Arnotts is open to any viable proposition to improve the city centre,” he says, adding that the city feels “a little bit neglected”.

“We want to bring Dublin back as an international destination and bring it back to its most beautiful best. We want to be part of the conversation for the right solution; if that is pedestrianisation of certain streets, the need for more amenities, encouraging modes of transport, and street dining or other initiatives. It is important that proposals have to work for everyone: large and small retailers, city dwellers and shoppers.”

He feels that Dundrum will probably complete the group’s store footprint, which includes Brown Thomas outlets in Cork, Limerick and Galway. It will leave just one BT2, a beauty-focused outlet in Blanchardstown. The group will look at future opportunities as they arise, McDonald says, but nothing is planned.

He sees big potential for digital, however. “Online gives us such an opportunity to complement our physical business, and for customers to experience our brands differently online,” he says. “We want to be the best digital experience we can be in the market.”

Stellar growth in the pandemic endorsed the investment. “We are going to put in the service proposition, unparalleled in the marketplace, similar to what our physical offering is,” he says. “We are very comfortable going forward about the physical and digital co-existing.”

More positivity. Prospective new owners, take note.

The life of Donald McDonald

Gladiator is McDonald’s favourite film

DREAMWORKS/EVERETT COLLECTION/ALAMY

VITAL STATISTICS
Age: 51
Lives: Clontarf
Family: married to Theresa with a daughter, 25, and son, 23
Education: Ardscoil Ris and Dublin Business School
Favourite film: Gladiator, pictured
Favourite book: The Obstacle is the Way by Ryan Holiday

WORKING DAY
I work in the office rather than at home. I am the only one left on this floor so I am naturally self-isolating. I am in the stores all the time. We try to have as many meetings on the shop floor as possible. It’s better to have the meetings in person so you can look at what you are talking about. I work 70 hours a week. I leave the house at 7am and do not get home before 7.30pm — and I work six days week. It’s a full working week.

DOWNTIME
I play a bit of golf (I am a member of St Anne’s Golf Club on Bull Island). I might get to play ten or 12 times in a normal year. I have played since I was a junior: I joined in 1980 so I can still pick up the clubs and play to a reasonable standard. I go walking at the weekends. I have tried walking to and from work (it’s about 9km one way) and one week I think I managed it three times in and out. That’s the record.