Furniture retailer revises business plan as losses soar to €5.8m

A FURNITURE retailer has put in place a rationalisation programme after two years of losses amounted to a combined €5.8 million.

Redundancy costs, bad debts and stock impairments led to the Galway-based Curley Furniture & Carpets Ltd recording losses of €2m to the end of March last year.

The retailer operates outlets in Galway, Ennis and Kilkenny and clearance stores in Sligo and Craughwell and the loss last year of €2m followed the company recording a €3.8m loss in 2009.

The number of employees more than halved from 92 to 45.

A note to the accounts said “the directors implemented a rationalisation programme since the year end and they have reduced the cost base of the business significantly due to a continuing decline in revenue”. It said the directors were working with advisers and bankers in respect of a new business plan.

The company had net liabilities of €5.7m at the end of the year and, combined with the loss, the returns state that those factors “represent a material uncertainty”. However, the directors believe that based on the current market and trading activities, the directors will obtain continued support from the company’s bankers which should facilitate the firm meeting its obligations for at least a period of 12 months from the date that these financial statements are approved.

Operating losses fell from €3.5m to €372,859 last year. No turnover figure was provided for last year. Gross profit was €2.98m compared to €4.8m the previous year. However, a stock impairment of €1.2m, bad debts of €177,247 and redundancy costs of €12,454 led to the losses of €2m. Interest payments of €233,044 also contributed.

Staff costs fell from €2.7m to €1.6m, while the company’s loans and overdrafts reduced to €5.3m during the year.

John Curley was not available yesterday for comment.