Losses at Irish arm of Gap increase 33 per cent

Pre-tax losses at the Irish arm of US clothing company Gap last year increased by 33 per cent to €411,575.

New accounts filed by Gap Stores (Ireland) Ltd show that the company recorded the increased losses in spite of revenues increasing by 2 per cent from €12.67 million to €12.89 million in the 12 months to the end of February 2nd last.

The fashion retailer has outlets at Limerick, Blanchardstown, Dundrum shopping centre, Cork and these followed Gap opening its first Irish store at Arnotts in 2006.

The directors’ report for the Irish firm states that revenues increased marginally and the increase in operating losses was “due to increased administrative costs”.

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The pre-tax losses of €411,575 last year follow pre-tax losses of €308,156 in the prior year.

Numbers employed by the firm last year increased from 109 to 140 with staff costs increasing from €1.8 million to €2 million.

At the end of February 2nd last, the firm had accumulated profits of €1.2 million. The firm’s cash more than doubled from €502,230 to €1 million.

The firm’s profits last year take account of non-cash depreciation costs of €363,094 while the firm’s rental charges increased slightly €1.79 million to €1.8 million during the year.

The firm’s cost of sales last year increased from €6 million to €6.1 million and the company enjoyed a greater gross profit of €6.7 million last year compared to €6.6 million.

However, increased administrative expenses from €6.9 million to €7.1 million resulted in the increased operating losses of €411,575 last year.

The directors state that the principal risk facing the business is the ability to gauge the fashion tastes of its customers and to provide merchandise that satisfies customer demand better in a timely manner.

They state: “The company will continue to improve its core business by creating the right product and store experience, retaining and developing the best talent in the industry and examining the organisational structure to ensure that it effectively supports the business and meets customer needs.”