Jack Fagan

One of the top fashion shops on Dublin's Grafton Street, Jigsaw, is being forced to close due to runaway rents on the street. The UK multiple, which has been trading here for about 12 years, has just agreed to sell its lease to another British fashion house, Ted Baker, for a reputed €1.4 million.

The store at 42 Grafton Street is regarded as one of the best on the street - it was formerly occupied by Aer Lingus - because of its good layout and the fact that the ground floor extends to 251sq m (2,700sq ft). The first floor is also used for retail but is regarded as office space because it was upgraded by the tenant.

The high premium paid for the lease underlines the fact that it is one of about a dozen outlets on the street with large retail areas.

The rent for the shop was recently increased by 130 per cent to €750,000. Agent Quinn Agnew advised the owners, Bank of Ireland Asset Management. At least one other store facing a substantial rent increase in the coming months is also considering whether to close.

Colm Bryant, a senior executive in Jigsaw's London HQ, said that it was a matter of either closing or staying on and losing money following the substantial increase in the rent. "We can't hope to increase our takings that much." The group, which operates 50 stores mainly in the UK, is to look for an alternative location in Dublin where rents are considerably lower.

For fashion devotees, Jigsaw's replacement by Ted Baker will usher in one of the new global fashion brands that punches above its weight in terms of profile. Ted Baker began as a mens' shirt shop in Glasgow but rapidly expanded into a fashion label selling watches and perfume, as well as clothes. Cultivating a quirky image, it has persuaded customers to pay higher prices at a time when many UK retailers are struggling to maintain margins. The success of Ted Baker has been phenomenal; since its launch in 1998 it has grown into a €113 million business, with more than 900 outlets.