Arcadia records €17m in losses

The Irish arm of the British-owned retailer that sells the Topshop, Dorothy Perkins, Topman and Burton brands plunged into the red last year after recording a loss of £14.1m (€17.3m).

Accounts filed with the Companies Registration Office by Arcadia Group Multiples (Ireland) show the firm incurred the loss after recording a charge for onerous leases and fixed asset impairments totalling £14m.

The £14.1m loss follows the firm recording a pre-tax profit of £1.7m in 2010. Revenues decreased by 13% from £59.1m to £51.3m in the 12 months to the end of August.

The directors’ report states that during the year, along with the decline in revenues with margins markedly lower “all brands found trading conditions in Ireland extremely difficult. To counteract this decline in performance, the company has sought to reduce costs wherever possible”.

The firm’s accumulated profits last year stood at £86.9m. Staff in Ireland declined from 901 to 815. Staff costs reduced from £14.2m to £12.4m.

Before the exceptional cost of £14.04m was factored in, the firm recorded a gross loss of £74,000.

The cost of sales totalling £51.4m includes a non-cash depreciation charge of £1.59m. £13.4m has been provided for the onerous leases on loss-making stores and an impairment charge of £564,000 on fixed assets.

Explaining the lease provision, the note states: “In light of the difficult trading conditions being experienced by the company, the directors have reviewed those leasehold stores currently making a loss to assess whether their future operating cash flows are projected to meet their rental and other property cost obligations.”