Eason seeks further €2.5m in savings

Irish retailer Eason has told its trade unions it needs another €2.5 million in cost savings due to continued weak consumer demand resulting from the economic downturn.

It is understood this will not involve redundancies among its near 1,000-strong workforce or any store closures. Instead, the company has begun discussions with Siptu and Mandate to seek savings through reductions in payroll costs and other changes to terms and conditions.

These discussions are expected to cover everything from core pay, to restructuring overtime payments and working arrangements for Sundays and bank holidays.

Like most retailers in Ireland, Eason has significantly restructured its operations since the economy here crashed in 2008. It implemented a cost reduction programme between 2011 and 2012 that delivered annual savings of €6.1 million.

This was in the expectation that consumer sentiment would have turned by now. However, retail sales remain fragile due to austerity measures imposed by the Government.

Tender lost
In addition, Eason recently lost out in a tender to retain its shops at Dublin Airport.

The Irish Times has learned that Eason wants to have a new agreement with unions and employees agreed in early 2014. A spokesman for Eason confirmed than an “engagement process” had begun with its unions but said it was at an “early stage”. He declined to comment on what specific cost saving measures were being sought by the company.

Back in the black
Eason and Son Ltd returned to the black last year by recording a pre-tax profit of €3.1 million for the 52 weeks to the end of January 2013. This compared with a loss of €6 million in the previous year and marked the first time since 2008 the company had recorded a profit. This turnaround was largely due to savings achieved in its payroll costs.

Turnover from continuing operations declined by 2.8 per cent to €244.9 million last year. Like-for-like retail turnover in the Republic, excluding airports and online, declined by 5.9 per cent last year and by 4 per cent in the North.

The cost reductions implemented by Eason are part of a wider restructuring of the business that has seen a multimillion euro investment in store refurbishments, the development of a network of franchised shops, an upgraded IT infrastructure, the launch of an online offering and a loyalty card, and a greater push into certain product areas such as school books.