Profits at fashion retailer Mosaic rise 17% to €6.9m

Retail group Mosaic Fashions has reported €6.9 million in pretax profits at its Oasis and Coast women's fashion stores in Ireland.  Arthur Beesley, Senior Business Correspondent, reports.

Accounts just filed for the Icelandic-backed group show that the Coast chain was the main driver of its growth in the year to January, while profits fell back in the Oasis stores in one of Mosaic's most successful markets.

The brands occupy different places on the price spectrum. Coast sells upmarket occasionwear while Oasis sells high turnaround fashion items.

Sales in the two chains rose 35 per cent to €44.2 million, but the advance was offset by a decline in profit margins that saw pretax profits rise by 17 per cent from €5.9 million.

The Coast brand, which has 13 outlets here, saw its sales rise to €15.5 million from €6.4 million. Pretax profits in this brand rose to €5.2 million.

The Oasis business, which has 25 outlets, saw its sales rise to €28.7 million from €26.4 million, but lower profit margins saw pretax profits fall back to €1.7 million from €3.9 million.

Mosaic is 30 per cent owned by Icelandic retail investment fund Baugur and the remainder of the group is floated on the Reykjavik stock exchange.

The Mosaic group also owns the Whistles and Karen Millen ladies' fashion chains. These brands have 10 Irish outlets, but their operations are not included in the accounts of the Dublin-registered vehicle Oasis Fashions Ireland Ltd.

The group's advance in the booming Irish market last year was recorded before consumers started to feel the impact on their disposable income of rising interest rates.

With the Christmas shopping season beginning in earnest this weekend, Mosaic's managing director in Ireland, Miriam Flahive, indicated yesterday that the Coast and Oasis stores in Ireland continued to outperform their counterparts in Britain.

"Trading for both brands has certainly been more positive than UK trading patterns. I would certainly envisage that we will hit our targets set in January," Ms Flahive said.

"We are hoping to open at least three more stores for both Oasis and Coast in 2007.

"We have been actively looking for new locations for new stores and indeed the number may exceed six new stores by the end of 2007."

Profits retained by the Oasis and Coast stores stood at €16.3 million at the end of the financial year.

The accounts show that the business was reorganised last January with the operations of the Coast brand transferring to a new company, Coast Stores Ireland. The business did not pay out a dividend last year.

Mosaic has significant funds at its disposal to grow the business. The group is known to be paying annual rents of more than €1 million for a new Karen Millen outlet on Grafton Street.

Karen Millen had apparently agreed to buy the leasehold interest held by Principles for €1.45 million before the intervention of Salix, the Bank of Ireland pension, which is landlord of the building.

Salix acquired the lease for the same figure, with the agreement of Karen Millen, and its agent Jones Lang LaSalle, then proceeded to let the premises to Karen Millen.