Losses balloon at Dunnes Stores’ Northern Irish business

Losses ballooned at the Northern Irish arm of Dunnes Stores last year as the retail giant adjusted to the impact of Covid-19, newly filed accounts show.

The retailer, which has 15 stores in the North, reported a £8.1 million (€9.6 million) pre-tax loss for 2020, as against a £1.03 million (€1.23 million) loss in the prior year.

No explanation was provided by directors at Dunnes in accounts for the year, which have just been filed, for the rise in losses although they said they were monitoring the impact of the coronavirus pandemic on the business, as well as noting a risk to trading from supply and demand factors.

The company has previously expressed concern about the financial impact of the pandemic on its business.

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In comments on its previous year’s accounts, which were signed off in October 2020 in the midst of the pandemic, the company stated: “Covid-19 is having a material impact on the operations of our business and we are incurring significant additional costs implementing social distancing measures in our retail stores.”

However, directors said that, as the group was not reliant on external financing and had a robust balance sheet and strong cash flow, they had a “reasonable expectation” that it had adequate resources for the foreseeable future.

No dividend

The company decided not to pay any dividend to other group undertakings in 2020. Dividends have been falling in recent years, with just £120,000 (€143,000) paid in 2019, down from just under half a million the previous year. However, despite reporting losses in four of the past five years, this is the first time in that period that no dividend has been paid.

The company reported a foreign exchange loss of £2.87 million (€3.42 million) in 2020, up from a £1.4 million (€1.67 million) loss a year earlier. It also recorded a £950,000 (€1.13 million) loss linked to the disposal of an investment property.

Dunnes Stores is one of Ireland's biggest department store chains, selling food, household goods, clothes and other products. Essential parts of these businesses, including its supermarkets, stayed open during lockdowns imposed in a bid to contain the disease last year.

Dunnes Stores (Bangor) Ltd is a subsidiary of the unlimited Dunnes Holding Company, which is not obliged to file accounts. The UK figures are the only ones available to give any insight into the financial performance of the group.

Along with stores in the North, it was also responsible for the group’s outlets in Britain, which were closed in 2018.

Sales at the Northern Ireland subsidiary fell 11 per cent in the 12 months to December 26th, 2020, to £101.7 million (€121.1 million). This follows a near 6 per cent rise in turnover a year earlier.

The company employed just more than 1,000 people in 2020 with staff costs, including wages and salaries, totalling £14.9 million (€17.7 million).