Online sales help Debenhams to slash Irish losses

By Gordon Deegan and Geoff Percival

A growth in online sales helped the Irish division of UK department store Debenhams sharply reduce its pre-tax losses to €246,000 last year.

Newly-filed accounts for Debenhams Retail (Ireland) show the company slashed its pre-tax losses, for the 12 months to last September, by 95%.

The improvement in the retailer’s finances were driven by a growth in online sales and a sharp drop in store rents.

Debenhams operates 11 stores here in Dublin, Cork, Galway, Limerick, Waterford, Newbridge and Tralee.

However, online sales contributed to revenues increasing from 11% to 14%, with the percentage contribution of store revenues decreasing from 89% to 86%. Revenues fell 5.6% to €170.6m, though the reporting period was marginally shorter. The company’s lease costs last year reduced from €25.3m to €19.1m.

In the accounts, the company also said that the current economic environment is expected to remain uncertain and volatile in 2018.

Earlier this week, Debenhams reported a 52% slump in group profits for the first half of its current financial year, but said that online sales, and its operations in Ireland and Denmark had aided growth in its international division.

While it said its Irish stores have continued to suffer some of the same market pressures as the UK, it added they “continue to benefit from the restructuring achieved in 2016.”

Debenhams Ireland exited examinership in that year, with the loss of nearly 100 jobs. That move helped the Irish unit cut employment costs by over 7% in its last financial year.

In the first-half group results, Debenhams also attributed a 3.5% increase in international sales to online growth, and its performance in Ireland where the strong euro helped.

The company declined to comment, however, on whether Ireland may be included in an ongoing shop closure review, which has so far earmarked 10 UK stores for potential closure.

However, it is committed to providing loan facilities for three years from 2016 to the Irish unit, which gives it the resources to continue in business for the foreseeable future.

Most Read in Business

  • House builds at ‘incredibly low levels’

    House building is at “unsustainable and incredibly low levels” and is coming nowhere close to meeting demand, according to a new analysis by Goodbody’s Dermot O’Leary.

  • ESB warned on staff moves

    The energy regulator has expressed its concern about the plans of ESB to transfer senior executives into its retail business which may give the conglomerate an advantage over its retail energy rivals.

  • BoI shares in ‘key’ investor day in June

    Davy Stockbrokers has upped the stakes for new Bank of Ireland chief Francesca McDonagh, saying the lender’s investor day next month — in which it will spell out its plans to analysts and investors — will be “a key catalyst for the stock”.

  • Why Samsung is stumping up £400m to rival Apple

    Will anything change for the tech changes following the latest ruling on patent infringement?

  • Sanctions used as tool to crush competition, says Putin

    The US launched fresh sanctions in April against some of Russia’s richest and most powerful people.

World Markets