Pretax profits decline at Irish arm of H&M

The Irish arm of clothing retailing giant H&M sees growth opportunity here and are looking to enhance outlets at Liffey Valley in Dublin and in Cork, according to its latest accounts.

The accounts for Hennes & Mauritz (Ireland) Ltd show that pretax profits declined by 46 per cent to €689,776 due to higher costs in 2021.

The Swedish-headquartered retailer’s pretax profits declined despite revenues increasing by €2.08 million or 4.5 per cent from €46.41 million to €48.49 million in the 12 months to the end of November 2021.

The directors, in a note with the accounts, said that the retailer’s decrease in gross margin by 8.5 per cent was predominantly due to cost of sales increasing by 41 per cent from €12.09 million to €17.09 million.

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The note said that post-year end in May 2022, dividends of €2.5 million were declared to its sole shareholder, Hennes & Mauritz GBC AB.

In accounts signed off on March 27th, the directors said that the retailer’s service had been enhanced with the launch of click and collect and a new membership programme at the end of 2022.

On the retailer’s future developments here, the directors said that they aim to maintain growth in competitive market conditions “and will continue to look for suitable locations for new stores and ensure relevance of product profile”.

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The retail group here comprises 16 H&M stores, six COS stores and one & Other Stories and the numbers employed declined by one to 374 in 2021.

The accounts said: “To protect its financial position during the pandemic, the company availed of the necessary support from Government schemes as well as actively managing the liquidity risk.”

Staff costs in 2021 increased by 3.5 per cent from €8.15 million to €8.43 million. The firm also benefited from unspecified “other operating income” of €264,054 in 2021.

The profit for 2021 takes account of non-cash depreciation costs of €9.13 million and lease costs of €2.65 million.

At the end of November 2021, the firm had shareholder funds of €15 million that included accumulated profits of €8.43 million.