Shoppers and staff have been shocked to see one of Ireland’s oldest department storestaken over by the Anglo Irish Bank and Ulster Bank.

The takeover plan, dependent on approval by the EU competition commissioner, has come about because of the store’s inability to service borrowings of more than €250 million.

The store has insisted that it has been performing “very strongly” and said trading was ahead of the Irish retail market. It stressed that the 950 employees’ jobs remained secure and it would be “business as usual at Arnotts”.

It is expected that the banks will want to recover as much of their loans as possible, and a sale of the business is the exit strategy for both institutions. Before any such sale, loans have to be restructured, a new management team appointed and long-term property plans put on ice.

Arnotts is an iconic department store which been trading on Dublin’s northside for 167 years and it has  a key place at the heart of the city’s history.

A member of staff commented: “There have been a few senior management meetings recently and some management had been made redundant so we weren’t entirely surprised by the news. But I think we’ll be grand. Sure you can’t shut Arnotts, it’s been here too long.”

One shopper remarked: “It really is part of who we are. You can go to any shopping centre in the world and you won’t find an Arnotts. It can’t close, it would be like when Bewley’s closed. It had to reopen almost immediately.”