Debenhams loses €6.2m in Ireland as retail market remains challenging
Published 11/04/2015 | 02:30
Britain's second biggest department store operator - Debenhams - has continued to rack up multi-million euro losses in Ireland as the retailer battles the fallout from the crash.
Its Irish arm made a €6.2m operating loss in the 12 months to the end of last August as it struggled in a the post-bust environment.
That was less than the €7m Debenhams lost in Ireland during the previous 12 month period, but underscores the difficulties still facing the sector here.
Turnover at the Irish arm, which trades from 11 outlets, edged slightly higher to €163.6m in the last financial year, up from €162.1m.
Its interest bill rocketed last year to €2.4m from just €197,000 a year before, widening its pre-tax loss to €8.6m for the latest period. That big increase in interest repayments in the last financial year relates to a €2.2m foreign exchange loss on borrowings. The Irish unit owed €35.5m to group undertakings at the end of last August.
The company also didn't pay a dividend to its UK parent last year, having handed over €53m the year before.
"The external commercial environment… is expected to remain challenging in 2015," the company noted of its Irish operation.
It paid €30m in wages and salaries last year.
Debenhams also announced yesterday that it has appointed former Home Retail Group chief executive Terry Duddy to its board as a non-executive director.
Mr Duddy was the boss at the Argos and Homebase owner until last year.
His appointment comes as the department store operator tries to revive what has been a flagging performance despite significant improvements in the British economy.
Debenhams is expected to post flat half-year profits of about £83m (€114m) next Thursday when it releases results. But the buoyant UK economy is also heaping further pressure on Debenhams to start delivering better results.
The group had a poor performance in Christmas 2013, but during the latest festive season it said like-for-like sales were 4.9pc higher, helped by online trading and fewer sales days.
But the chain, headed by chief executive Michael Sharp, also said that it didn't anticipate a significant change in consumer confidence this year and that the trading environment would remain competitive.
Last year, Debenhams set out five priorities designed to boost the business.
They included revamping the way it runs promotions; building a more competitive and economic online multichannel business; and accelerating global growth.
Mr Sharp's strategy has been questioned by some investors, however.
Debenhams' chairman is Nigel Northridge, who's also the chairman of Irish gambling group Paddy Power, and who also sits on the board of Aer Lingus.