Eason says revenues down 8.7% in 'extremely challenging' climate

James Osborne, the chairman of books-to-stationary retailer Eason, has written to shareholders to say that revenues had fallen by 8.7 per cent in the final 11 months of 2013 in what he described as an "extremely challenging" retail environment.

Mr Osborne, in a letter to Eason’s 239 shareholders dated February 2014, did not say what the businesses turnover now was but the group’s accounts to the year to the end of January 2012 state it had a turnover of €244.9 million. This indicates turnover is down about €21 million.

Osborne told shareholders that “the exit from Dublin airport [where Eason had retail units] accounted for 1.4 per cent of the decline, wholesale accounted for 1.4 per cent and our retail estate, including internet and franchise, accounted for the balance of 5.9 per cent.”

'Satisfactory'
Eason's turnover during December last year he said was "satisfactory" and "while it declined on the same period last year we outperformed the previous 11 months trend, with Eason trading ahead of the market and competitive set."

He said management led by chief executive Conor Whelan continued to "pursue a programme to further reduce cost," and had begun negotiations with unions and employees about how to do so.

“The Eason corporate restructuring [to divide its retail business from its property assets] is progressing and should be completed in the coming weeks when bank consent to complete has been granted,” he said.

Osborne said the 128-year old company was planning “new retail initiatives” to generate more revenue. Among these initiatives are further investment in its children’s department and in its teens and young adults division.

Development
Among other developments outlined by Osborne, a former chairman of Independent News & Media, was the acquisition by Eason of its franchise store in Dungarvan in October 2013 and the sale of its ground floor unit in The Square Shopping Centre in Tallaght.

“As you will be aware, the company’s bank borrowings are due for repayment in January 2015,” Osborne said. “The board believe, similar to 2012, that the refinancing process should be brought forward to align with the new three year business plan.”

This facility he said would be less than previously required, but he said a “key component of the new plan” was agreeing a cost reduction which would be “critical” to the refinancing process.

Mr Osborne told shareholders that it was “important” to acknowledge the contribution of its staff in helping the company.