The group's youthful new boss tells Arthur Beesley that Ireland's appetite for luxury will keep it on top.

Dalton Philips is at pains to stress that the onward march of the Brown Thomas group in 2004 had nothing to do with him. With pretax profits shooting upwards by 25 per cent to €24.19 million on the back of a 12.5 per cent rise in sales to €211.99 million, the luxury retailer has plenty to be proud about.

But Philips cannot claim any credit for the sterling performance because he was in Dusseldorf last year, running the German operations of the mighty Wal-Mart.

Only in May did he return to Dublin to take the helm at Brown Thomas on Grafton Street. Thus, at the age 37, he took his place among a growing but select band of youthful chief executives at the top of the Irish business scene.

A retailer to the marrow, Philips finessed his craft in a four-year stint in the "pile 'em high, sell 'em cheap" world of Wal-Mart, whose German unit has 92 outlets, 15,000 staff and annual sales of almost €3 billion.

While Brown Thomas is always more chic than cheap, Philips says the three levers of price, service and product assortment remain the same no matter what place a company holds in the retail hierarchy.

With British department store Harvey Nichols set to mount a fresh challenge to Brown Thomas's dominance of the luxury market with a new store in Dundrum, Philips will be concentrating on service and variety as the incumbent goes all out to protect and grow its patch.

Not that he frames the challenge from Harvey Nichols in that way. Far from it.

"They're going after a different customer from us. We're not concerned about that. We believe we've a strong product offering. We see very very little overlap in our brands.

"We are a city centre retailer and shopping in the city centre is different. It's a different experience from shopping in a shopping centre. Harvey Nichols is a small boutique in a shopping centre. We wish them very well. The customer who enjoys a shopping centre, I believe, is a different customer to the one who enjoys the city centre. Personally I see it as a more edited, controlled, scripted experience."

Still, Philips make no secret of Brown Thomas's renewed efforts to upgrade its stores on Grafton Street and its outlets in Cork, Galway and Limerick. With expenditure on luxury in multiples of millions, he sees the Brown Thomas group competing for Irish euro with big retailers in the global fashion world. This is an outlook he shares with Galen Weston, the Canadian businessman who owns the group. "It's not about being the biggest. It's about being the best at what you do," he says, quoting Weston.

"This year we've been investing in the business and when you invest in the business you expect to get returns on it. We're really investing in this business very rapidly to keep this business as the primary retail player in this country," he says.

"The Irish customer is a very well educated, very well travelled customer, and they expect us to be the best. Irish customers have very high taste levels. They don't compare you to other retailers in the country. They compare you to other retailers in New York, in Paris, in Milan."

But the top end of the market is not all. Brown Thomas's high-street fashion chain A-Wear now boasts 25 stores, with an initial foray into the British market through a concession in the Birmingham branch of Selfridges, a chain within the Weston empire.

There were two A-Wear openings in Ireland last year and another four this year in Sligo, Navan and at new shopping centres Dundrum, Dublin, and Mahon in Cork. Another two openings will take place this year, but Philips will not say where.

The Brown Thomas group has also opened new branches of the BT2 fashion outlet in Dundrum and at Blanchardstown, west Dublin. However, no further openings are planned at present.

While Brown Thomas does not break down the performance of individual stores or brand units in its accounts, Philips says current trading is positive. "We are well ahead of last year," he says. "We're bullish. We're very bullish. The Celtic Tiger from our perspective is roaring ahead. . . The indicators are very good. You've got good GDP growth. Inflation is tight."

While Philips recognises that the Grafton Street branch is a beneficiary of the Luas service, he believes the established players on Grafton Street should do more to "drive the character of the street." Such a remark sounds similar to the view of Dublin city manager John Fitzgerald in his concern about the "quality" of retailer on a street that now has a bookmaker and more than a few mobile phone and convenience stores. However, Philips steers clear of any direct criticism. "I'd like to see a wider mix and a wider diversity of retailer.

"I think we need to come together on the street and work stronger at creating that point of difference, not to Henry Street, but to the best streets in the world. We do need to continue to drive the character of the street."

Any such effort should not interfere with the operation of the free market, he says. "I think the city centre and shopping in Grafton Street is different from the shopping-in-a-mall experience and from a shopping centre experience. We've got to let the free market work.

"At the same time, we need to do a better job entertaining our customers who come into the city centre on Grafton Street. We can do more. We've the fifth-highest rent in the world. Customers have very high expectations of Grafton Street. I think we need to take leadership. I think we are part of the street."

Philips grew up in Glenealy, Co Wicklow, where his father, Tim, owned the Ballyfree egg business. While shopping trips to Brown Thomas feature in some of his early memories, childhood summers spent in a delivery van were his real introduction to the commercial world.

"I'm a retailer. I love buying and selling products."

In his experience, this side of business is intrinsically meritocratic. "Most retailers are meritocratic. If you work hard you can rise up the ladder quickly."

This he most definitely did.

After finishing an arts degree in UCD in 1990, Philips did a diploma in marketing in the DIT before taking a job with the Irish Trade Board in Milan. He took the retail path for four years with the Asian conglomerate Jardine Matheson with a series of jobs in Auckland, Sydney, Madrid and Hong Kong. Philips went to the US to do a two-year MBA at Harvard in 1996.

"When I was at Harvard in my year I was the only retailer. With an MBA you could go into any sector in 1998 from banking to consulting to aerospace, and I went back to retail because I love it. I was the only person from my year who went back to retail. You either love it or you don't and I do."

Yet if high-end retailing is always bound up with consumerism, Philips is not among those who see a hint of vulgarity in the spend-it devotion to shopping that has evolved in the boom years.

"I don't think the Irish customer is vulgar. I believe Ireland is a very classless society, unlike other European countries. I think the Celtic Tiger has been good for Irish consumers and they want quality," he says.

"I don't see the ostentatious display of wealth that you might see in other capitals. But I do think people are confident to make investments in quality products. The Irish consumer has a huge appetite for luxury products and they're very discerning."

Philips knows that his predecessor, Paul Kelly, set a testing standard with the strong results for 2004.

Although he has worked in more cities than some people visit in a lifetime, his most public test will be at home as he strives to build on record results. In Sao Paulo with Wal-Mart, Philips drove a bullet-proof car. His concerns here are different.

Factfile

Name: Dalton Philips

Position: Brown Thomas chief executive since May

Age: 37

Why he is in the news: Brown Thomas has reported record results, with pretax profits up 25 per cent to €24.19 million

Career to date: A graduate of UCD and Harvard University, Philips returned to Ireland this year after four years with Wal-Mart and an earlier period with the Asian group Jardine Matheson

Family: A father of two, he is married to Penny Nesbitt, a member of the family that owns the Arnotts department store group