Business

Argos takes €43m financial hit from closure of Irish stores, including €23m in redundancy costs

British retailer closed 34 stores in Republic in June

British retailer Argos closed its network of stores in the Republic this year, including this outlet at the Omni Shopping Centre in Santry, Dublin. Photograph: Sasko Lazarov/RollingNews.ie

Gordon Deegan
Wed Dec 27 2023 - 06:00

The Irish arm of British catalogue retailer Argos incurred €43.4 million in costs arising from its decision earlier this year to shut down its store network here with the loss of 580 jobs.

In June, Argos shut its operation in the Republic after concluding that the investment required to make its operation here profitable was too large to be viable. Its operations in Northern Ireland were not affected by the decision.

Accounts just filed by Argos Distributors (Ireland) Ltd provide detail on the costs of the decision to quit the Irish market.

Closure costs of €43.4 million were recognised in the accounts, with redundancy costs amounting to €23.2 million.

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Eligible staff were offered an “enhanced redundancy package”, receiving four weeks’ pay per year of service on top of statutory requirements, bringing the total package to six weeks’ pay per year of service.

The small proportion of staff not eligible for redundancy under Irish law were offered a one-off goodwill payment.

The cost also includes closure provisions of €7.03 million, a write-down of leased assets of €9.8 million, €1.6 million in writedowns of property, plant and equipment, and €1.73 million in consultancy costs.

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The company, which is owned by the UK-based retailer J Sainsbury, recording a pretax loss of €24.1 million for the 12 months to the end of March 4th — almost double the €13.06 million pretax loss in the prior year.

The losses would have been much greater but for the company booking a €29.96 million gain on the €227 million sale of its investment in the Home Retail Group (Finance) LLP to Argos Ltd during the year.

Home Retail Group (Finance) acts principally as a financing and investment holding business.

Revenues at the Irish unit of Argos declined by €12.8 million or 9.5 per cent to €120.95 million as the number of stores operating during the year was reduced.

As the company has ceased to trade and will eventually be wound down, Argos said it was “currently addressing outstanding legal and regulatory obligations as part of the winding down process”. The directors added that “the company continues to settle residual liabilities and collect outstanding receivable balances”.

Staff costs last year declined from €16.2 million to €14.48 million as numbers reduced from 754 to 612, made up of 450 part-time and 162 full-time employees.

Shareholder funds on March 4th totalled €215.77 million, comprising share capital of €226.4 million offset by accumulated losses of €10.4 million.

Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times

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