Zara profits on rise, but Hilfiger feels the pinch

Pre-tax profits at the main Irish arm of international clothing giant, Zara, more than doubled last year to €6.2m.

This followed revenues at the Spanish-owned Za Clothing Ireland Ltd increasing by 14% from €50m to €57m in the 12 months to the end of Jan 31 last.

The accounts recently filed with the Companies Office show profits rose by 146% from €2.52m to €6.2m last year.

Numbers employed by the firm increased from 310 to 316 with staff costs declining marginally from €9.6m to €9.5m.

The profit takes account of non-cash depreciation costs totalling €3.4m with operating leases on property totalling €5.79m.

The firm’s shareholder funds totalled €17.8m that included cash increasing from €995,000 to €2.1m. The firm’s gross profit rose from €27.9m to €31.8m. Selling and distribution costs last year totalled €24.67m.

The directors state in their report that they “plan to open further stores as soon as suitable opportunities arise”.

In contrast, the Irish arm of Tommy Hilfiger saw its pretax profits declining by 72% from €417,211 to €114,185 last year.

Hilfiger Stores Ireland Ltd recorded the sharp drop in profits in spite of increasing revenues as a result ofthe firm’s expansion.

The firm’s gross profit rose by 19.5% from €5.2m to €6.25m in the 12 months to the end of last December.

The directors said “the retail sector has suffered significantly in the downturn, but the company has continued to be profitable in the current period”.