Barrister Richard Nesbitt's great-grandfather started working for Arnotts in 1867 but the move to take the retailer private springs from business know-how not loyalty, he tells Jane O'Sullivan

Richard Nesbitt tells an interesting tale of how his great-grandfather handed over the reins at Arnotts to his second son, William, a businessman in his own right, back in the 1920s.

"When he was around the age of 40, my great-grandfather Alexander called him in to have lunch in Arnotts. He was introduced to the other people around the table, shown the store and then my great-grandfather said as he was leaving: 'William is now in charge' and he suddenly found himself in charge of Arnotts.

"You could do it like that in those days."

For Mr Nesbitt, the barrister heading his family's bid to take private the retailer with which the family has been connected for more than 100 years, life is somewhat more complicated.

The indicative offer of €14.2625 per share made by Nesbitt Acquisitions, the consortium made up of some 40-plus members of the Nesbitt family along with the family of Arnotts chairman, Mr Michael O'Connor, is currently being pored over by the lawyers and bankers before being put to the shareholders who will eventually decide its fate.

Although Mr Nesbitt's day job involves acting for the State at the Moriarty Tribunal, he was brought up "eating, drinking and sleeping retailing".

His family has been involved with Arnotts since 1867, when his 16-year-old great-grandfather Alexander, tired of digging turnips, reportedly walked from the family farm in Antrim to take up an apprenticeship at Arnotts.

The Nesbitt influence in the company, founded 160 years ago and floated in the 1870s, grew steadily as Alexander rose to the top before being succeeded by his son, William, his grandson Ronald and his great-grandson, Michael.

But despite the family's long and close ties to the retailer, Mr Nesbitt says he was not motivated simply by loyalty to what went before when he decided to put together an offer to rival that made by the Lehman-backed consortium Carrgran.

"I am doing it because I believe Arnotts is an investment that the Nesbitts have been wise to be involved with," he says.

"I realised that, as opposed to give away our investment, to consolidate, we were positioned to do what my great-grandfather and grandfather and father have done, to simply continue investing."

He has managed the formidable feat of persuading 40-plus family members, spanning three generations and two countries, to back him in his plan.

The Nesbitt shareholding in Arnotts is held by the five children of Mr Nesbitt's grandfather, William, and their families, two of which are based in England.

Around 10 per cent of the Nesbitt stake is held through a family company, Art plc, with the remaining 5.5 per cent owned directly.

"I had to go and ask them for support and persuade them I was doing something that was sensible and it was a great litmus test for what I proposed.

"You're not going to get past 40 people with a dodgy idea. They believed me and they're fully onside," Mr Nesbitt says.

"The one thing they all said, and this is something that was probably instilled in us, was that this is something the Nesbitts had invested in, so why should we suddenly hand up our investment to somebody else?"

"In simple terms, the Nesbitts are buyers of Arnotts shares. They're not sellers."

Financial considerations rather than family loyalty may have been the prime factors behind the Nesbitt bid, but Mr Nesbitt admits he believes a venture capital takeover would be destructive for the company.

Because the Nesbitt offer represents a take-private by a substantial group of shareholders, it involves a far longer timeframe of 10 to 15 years compared to the three- to five-year investment period typical of private equity investors, he says. Nor will it involve the asset disposals entered into by venture capital investors to generate an adequate return.

"As far as I am concerned, the next generation will be well involved in this and that's what I want to get out of it," Mr Nesbitt says.

"It allows us to be much more careful about what we're going to do and not to have to do knee-jerk reactions that are destructive."

It also offers a greater chance of preserving what Mr Nesbitt calls the "Arnotts ethos" which centres on the close relationship between the company and its staff, who lived on site in the time of his grandfather.

"It's difficult to define what it means ... but I think it's just being straightforward with people and fair, realising that when there are two people working together a number of interests have to be taken into account."

He points to the success of the Arnotts pension fund, which was ahead of its time when it was set up in the 1960s and is now one of the most successful such funds in the State.

And what of his plans for the company? He believes Arnotts, which is well-known for its sponsorship of the Dublin Gaelic football team, has a very strong brand on which the company can build.

Under Nesbitt ownership, the company will consider expansion outside Dublin but not of its department store model. "Outside Dublin, I'm not certain you really have the department store populations, with the possible exception of Cork.

"But I do think we can bring part of our offer outside Dublin," he says, pointing in particular to the household part of its retailing mix.

It will also consider out-of-town shopping opportunities in Dublin, such as the new development at Cherry Orchard.

While he's not certain the firm has yet got the right merchandise mix in its Boyer store on North Earl Street, Dublin, he believes it's in the right location in a part of town that's set to develop.

As for its flagship Henry Street store, Mr Nesbitt believes it will continue to thrive, particularly when Luas begins to deposit 50,000 passengers daily on its doorstep.

"The far side of this, if we succeed and I'm optimistic we will, is to do what we've been doing and do it better."

While Mr Nesbitt will chair the new holding company that will own Arnotts if the bid is successful, he has no plans to take on an executive role.

"I'm not a retailer, I'm a lawyer. I like retailing, I think I understand the synergies, I think I have strategic vision," he says, but adds that he plans to stick with the existing executive management team.

Who will head that team remains to be decided, given that the current managing director, Mr Seamus Duignan, has signalled his desire to step down.

While Arnotts has shortlisted a number of candidates to succeed Mr Duignan, no appointment will be made until the current uncertainty over the company's future is resolved. "A range of people have indicated they are willing to do the job. I am very gratified by the quality of people who came forward.

"Until we know who's going to be in charge we can't really ask anybody to commit but we have people who are prepared to commit."

Whether the future will see a fifth generation of Nesbitts actively involved with Arnotts remains to be seen.

"This is a business and I don't believe in getting something just because of who you are," Mr Nesbitt says. "The structure is very carefully arranged to ensure that this is a professionally run operation. Hopefully Nesbitts will be able to play some role in the future. I'm sure they will."

Name: Richard Nesbitt, SC.

Age: 51.

Education: Public school in England followed by Kings Inns. He is a member of the Irish, Northern Irish and English Bars.

Career: He was called to the Inner Bar in 1993 and specialises in commercial litigation, intellectual property, company law, retailing and European law. He currently acts for the State in the Moriarty Tribunal's investigation of the award of the second mobile phone licence.

Other interests: He is a member of the Committee of Court Practice and Procedure, which reports to the Minister for Justice on issues relevant to the operation of the courts. He is also a member of the Representative Church Body of the Church of Ireland.

Family: Married to Madeleine, he has two children, Jamie (20) and Jessica (17).

Hobbies: A keen swimmer, cyclist and tennis player, he also enjoys skiing, wind-surfing, hill-walking and travel.

Why he is in the news: A non-executive director of Arnotts, he is heading Nesbitt Acquisitions, the family consortium seeking to take the retailer private.