Costs of expansion hit Irish discount store Euro General
Expansion costs and a €1.25m write-off in a subsidiary resulted in discount retailer, Euro General going into the red last year.
Euro General Retail Ltd operates more than 80 Eurogiant stores around the country. Accounts show that the investment made in fiscal 2015 with the opening of eight new stores contributed to a €1m pre-tax loss after a pre-tax profit of €1.25m in fiscal 2014.
Chief executive Charlie O'Loughlin opened his first discount store on Dublin's Moore Street in 1990 and the business today employs over 600. The expansion contributed to revenues rising from €60.74m to €68.5m in the 12 months to the end of May 10 last.
The directors state that "gross margins decreased to 41pc compared to 43pc in 2014".
The loss takes account of interest charges of €284,224.
The Eurogiant stores formerly traded as Euro2 and the directors state that post-tax deficit for the year was €663,226 after writing off its investment in the subsidiary company Hamill & Henderson of €1.255m.
According to the directors, the results for the year and the position of the group at the balance sheet date are satisfactory.
They state: "During the year, the company expanded its activities and product sales now include higher value, multi-price items. As a result, stock levels have increased."
Numbers employed by the group last year rose from 556 to 604 with staff costs increasing from €10.42m to €11.23m.
The firm has been vocal over the high costs of rents and the figures show that the company's lease rental costs last year declined from €6.15m to €6.05m.
On May 10th last, the firm had accumulated profits of €17.3m. The firm's cash pile increased from €1.16m to €1.64m. Directors' remuneration rose to €154,921.