AFTER MORE than two years in arbitration, Brown Thomas recently received the bad news that the rent for its BT2 store in Dundrum will increase by 40 per cent to €930,000 a year.

BT managing director Stephen Sealey described the outcome as “disappointing”. It was the first five-year review on a 25-year lease with an upward-only rent clause.

“It’s a lot of money,” he told me this week. “We will continue to trade the store but it’s highly frustrating that the landlord is making substantially more from the store than we are are. It hardly encourages you to invest more in the centre.”

Sealey’s frustration is understandable given the continued decline in retail sales, even if Dundrum is one of the better performing locations in the country. Sealey said the BT2 store is trading well and would make a “small profit” this year.

The Brown Thomas boss said trading remains “tough” but sales are up for the group as a whole.

Its Dublin stores are achieving single digit percentage growth but “it’s a bit tougher in the regions, particularly Limerick”.

Sealey once again scotched rumours that have been circulating of late that the Brown Thomas store in Limerick would be closed.

“We are certainly not ,” he said. “The store is profitable. In fact, we are just starting a €200,000 investment in the cosmetics hall there to breathe new life into it. So, far from pulling out, we’re actually investing to increase the offering in Limerick.”

BT is also making improvements to its Galway and flagship Grafton Street stores. “We have to keep investing in the stores to keep moving forward.”