Dublin’s most famous cafe is to close its doors for several months in an attempt to revive the business in the face of massive rent bills.
Bewley’s Grafton Street is to shut until the autumn, with 140 staff laid off, as more than €1 million (£780,000) is spent refurbishing the building to focus the business on the ground floor.
The six-month closure was agreed as the restaurant is losing €1.2 million (£938,000) a year and has annual rent of €1.5 million (£1.17 million) despite numerous battles for a reduced rate.
Bewley’s bosses described the money being paid to its landlord as “a legacy of the unsustainable property bubble”.
John Cahill, chief executive of the business group, said the plan was to sustain the cafe’s continuing presence in Grafton Street while protecting its physical fabric and enhancing the customer experience.
“Ongoing and major losses are not a viable option for the cafe. We have a choice of either permanent closure or investing in a realignment and rejuvenation of the cafe,” he said.
“We have chosen to underpin its future sustainability through a restructuring plan involving further investment and improvement.”
The refurbishment works will be the first improvements to the building since 2005.
Bewley’s said the cafe will reopen with a simplified focus on the ground floor and basement to reduce costs. It said the cafe will be repositioned to enhance its appeal to consumer tastes with a focus on high-quality handcrafted coffees, speciality teas, baked goods and patisserie while plans also include expansion of the craft bakery.
The business has been embroiled in a series of high-profile battles to have its massive annual rent switched from upward only reviews on the back of the economic collapse in Ireland.
A third party arbitrator established a rate from January 1 2012 at €728,000 (£569,000) a year but the higher rent still prevails after the company lost a legal challenge in the Supreme Court last July.
Mr Cahill accepted that the business would be loss-making even with a market-reflective rent today.
He apologised to workers affected by the closure and offered to open consultation to protect jobs where possible.
“We continue to commit our energy and resources into ensuring the protection of this iconic cafe, which has a special place in the hearts of so many people,” he said.
“We are planning this development in spite of adverse conditions including an excessive rent. We have fought for a market reflective rent in court cases up to and including the Supreme Court where, unfortunately, we received an adverse ruling.”