Citing dwindling cruise arrivals, one of the Cayman Islands’ largest retailers is reducing its operations on the waterfront. Island Companies is closing its stores in its Flagship location downtown.
The board of directors of Island Companies, which is owned by Dart Enterprises, made the decision to close the stores following what the company described as “years of declining cruise arrivals, existing market conditions and the 2-3 year outlook.”
In a statement issued by Dart on Tuesday, the company said, “Although the government has confirmed its commitment to the new cruise ship berthing facility, realistically, even if the project was to start this year, it is still a few years out.”
The company confirmed that it would close Island Time, Watch Me/De Sunglass Man, Pandora and Island Jewellers at the Flagship building. “The decision was supported by the fact that all of the products offered in these stores will still be available at our other George Town location, Island Plaza, as well as the Camana Bay and Airport locations. Additionally, the unique apparel store – Caribbean Canvas Company – also located in the Flagship building remains open.
According to the company, five people in its head office lost their jobs in the store closures, including three work permit holders, one residency and employment rights certificate holder, and one Caymanian.
“Given the other Island Companies locations, all of which remain open, we were able to reassign 17 sales professionals to other stores,” the statement read.
According to information provided by the Department of Immigration in August 2012, Island Companies was one of the country’s 10 biggest employers of work permit holders, with 105 on staff.
The entire Dart Group had 645 employees, including 243 work permit holders, according to information provided by the Dart Group in January 2013.
The future of the Flagship Building remains unclear.
“We are currently evaluating our options to activate the soon-to-be-vacant space. Island Companies remain committed to George Town through our open and operating retail investments in downtown along with all the other retail businesses in George Town. We look forward to the start of the new cruise berthing facility,” the Dart statement read.
Cayman is experiencing a historic low point in terms of the number of arriving cruise passengers. The 1.4 million arrivals expected this year is down from nearly 2 million in 2006 and is expected to be the lowest number in more than a decade. Good news, however, has been said to be on the horizon.
In July, the Port Authority of the Cayman Islands said cruise arrivals should increase in 2014 and 2015, with about 1.8 million passengers expected in Cayman for those two years, due to new bookings that start October.
Coupled with the decrease in passengers has been a drop in the amount of money cruise passengers are spending on island.
From 2005-2011, per-passenger cruise spending has declined by 28 percent (from $93 to $67 per passenger).
Overall spending by cruise tourists has declined by 43 percent (from $150 million in 2005 to $85 million in 2011), according to the latest figures available from the government’s Economics and Statistics Office.
While the cruise decline has already been hitting downtown retailers hard, until the Island Companies news, the impact had largely been limited to retailers not located on the waterfront.
In July, IRG property firm told the Caymanian Compass that prime waterfront slots had maintained their retail value and a 100 percent occupancy rate. Further back, though, vacant space has nearly doubled since 2008, despite rental rates dropping by about half in that time. The amount of vacant space in the inland area was about 10 percent of available space, according to IRG.
Marking 35 years of doing business in Cayman, Island Companies was established in 1978 by John Rea and Renard Moxam under the name “Renard’s Sports World,” according to the company’s website. In 1986, it was renamed Island Clothing Company and drew in a third shareholder, Lee Aronfeld.
By 1993, the business was renamed again to Island Companies and in 2004, Island Companies began its relationship with Dart. Besides Island Companies, other companies in Dart’s Active Capital Ltd. portfolio include Blackbeard’s Trading Company, Cayman Distributors and Bernard K. Passman Galleries.