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.