GAP's Irish stores suffer sales slump and profits fall by 50pc
The Irish arm of US retail clothing giant GAP sustained a slump in sales and profits last year, halting a number of years of sales growth.
According to new accounts filed by GAP Stores (Ireland), the firm recorded a 50pc decline in profits, from €1.67m to €831,194.
Sales fell from €11.9m to €11.6m in the 12 months to the end of January 31 last.
The drop in sales came in spite of the GAP's fourth new store - a 10,000 sq ft outlet in Blanchardstown - operating for the full 12 months. The store opened in March 2013 and followed openings at Dundrum Town Centre and Cork. GAP opened its first Irish store in Arnotts in 2006.
The downturn in Ireland follows efforts by its parent to turn around the business in the US. It announced in July that it intends to close 25pc of its stores in North America in response to a drop in earnings this year.
The directors of the Irish firm disclose that the firm paid a dividend of €5m to its immediate parent, Gap (UK Holdings) in September 2014.
The directors' report states that "the level of business and the financial position at the financial year end were satisfactory and in line with the directors' expectations".
They add that "opportunities will continue to be sought to maximise profitability and market share in the Irish casual apparel market".
Numbers employed rose from 91 to 94 with staff costs falling from €1.42m to €1.39m. At the end of January, the firm had accumulated profits of €1.1m following the dividend payout. The firm's cash decreased from €5.289m to €619,230. Gross profit reduced from €6.97m to €6.5m.
The profits take account of non-cash depreciation costs of €279,791 while the firm also sustained increased rental charges - from €1.024m to €1.32m. Increases in cost of sales (from €4.98m to €5.11m) and administrative expenses increasing from €5.3m to €5.68m also hit profits.