Top Shop owner cuts losses from €14m to €327k

Pre-tax losses at the Irish arm of a UK retailer that sells the Top Shop, Dorothy Perkins, Top Man and Burton brands last year narrowed sharply from €14m to £277,000 (€327,947).

Accounts just filed by Arcadia Group Multiples (Ireland) Ltd to the Companies Registration Office show that the firm reduced its losses after revenues decreased by 9% from £51.3m to £46.6m in the 12 months to the end of Aug 25 last year.

The reduction in losses arises from exceptional charges reducing from £14m to £1.78m.

The figures show that the firm paid a dividend of £77m to its parent last year.

The numbers employed by the firm last year reduced from 815 to 788.

The directors’ report states: “During the year, turnover declined by 9% as all brands found trading conditions in Ireland extremely difficult. To counteract this decline in performance, the company sought to reduce costs wherever possible.

“Despite prevailing market conditions, the board remains optimistic that the continuing investment in stores and freshness of products will enable the company to meet its objective of growing both total and underlying sales.”

It continues: “Further improvements to the supply chain, including tight stock and commitment management, will also be key to ensuring that gross margins are optimised going forward

The decline in numbers employed during the year contributed to staff costs reducing from £12.58m to £10.8m.

The returns show that before the exceptional cost of £1.7m is factored in, the firm recorded a gross profit of £311,000. The cost of sales totalling £44.5m includes a non-cash depreciation charge of £1m.

A note attached to the accounts confirms £1.78m has been provided for the leases on loss-making stores.

Explaining the onerous lease provision, the note states that “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.”