Debenhams Irish losses soar

Debenhams’ Irish business has reported pre-tax losses of €20.64 million (£18.2m) in the year to September 2018, after facing substantially increased exceptional costs of €18.77 million.

The department store’s parent company was placed under the control of administrators earlier this year, but the Irish business continues to trade as usual. It has 11 stores in Ireland in cities including Dublin, Cork, Galway, Kildare, Kerry, Limerick, and Waterford.

Pre-tax losses leapt to €20.64 million from €246,000 a year earlier.

During the year, revenues fell 1% to €168 million and the company’s performance is expected to remain subdued over the short term, as directors said “the external economic and commercial environment is expected to remain uncertain and volatile in 2019”.

New accounts filed by Debenhams Retail Ireland Ltd also showed that the company reviewed its store portfolio and identified stores that were "at the risk of becoming unprofitable over time”. This resulted impairment costs on its stores and onerous lease charges of €13.7 million, according to local media reports.

The review also resulted in a non-cash impairment charge on goodwill of €3.38 million, whilst the chain’s Redesigned strategy meant an exceptional charge of €1.68 million related to redundancies due to store restructuring.

Online sales now account for 17% of revenues at the Irish company, with the remaining 83% being generated at its bricks-and-mortar stores. And its workforce shrunk from 1,454 to 1,373 employees, contributing to a decline in staff costs from €30.9 million to €29.5 million. Finally, non-cash depreciation costs totalled €3 million.

Debenhams Irish losses soar

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