Debenhams Ireland upbeat as sales grow and loss narrows
Stores benefit from strong gains in foreign exchange movements on financing costs
Employment costs for the group, which sought 98 voluntary redundancies last year, totalled €33.3 million
The Irish subsidiary of department store chain Debenhams, which successfully exited examinership last year, has said it expects future growth in the Republic.
Accounts filed recently for Debenhams Retail (Ireland) Limited show turnover rose 8.5 per cent for the 53 weeks to September 3rd, 2016 to €181 million at the business which has four stores in Dublin, two in Cork, and others in Galway, Limerick, Newbridge, Tralee and Waterford.
Debenhams recorded a sharply increased operating loss of €9.3 million compared with €3.24 million in 2015. However, a €4.3 million gain in finance costs on foreign exchange movements saw the pretax loss narrow to €5.3 million before exceptionals, compared with €5.8 million the previous year.
Accounts recently filed for a related company Debenhams Retail Holdings (Ireland) Limited, recorded a loss of €55.5 million due to impairments after its trading subsidiary, Debenhams Retail (Ireland) Limited, issued 20.8 million ordinary shares to the UK parent. That watered down the Irish holding company’s stake in the Dublin-headquartered trading unit.
The High Court last August approved a restructuring for Debenhams Retail (Ireland) to continue trading, saving up to 1,330 jobs. The plan allowed the company to exit examinership, which it had sought because of consistent losses sustained since the recession in 2007, high rents, and after the withdrawal of support of its UK parent, Debenhams Retail Plc.
As part of the restructuring process, the High Court last year directed that amounts owed to group undertakings of €29.4 million be written off, leading to that sum being listed as an exceptional credit for the trading business.
Employment costs for the stores, which sought 98 voluntary redundancies last year, totalled €33.3 million. The company employed 1,508 people at the end of the reporting period, as against 1,635 a year earlier.
“The external economic and commercial environment is expected to remain uncertain and volatile in 2017. However, the successful restructuring and exit from examinership has positioned the company well for a successful future and it has begun to implement investment plans to deliver growth going forward,” the company said.