Profits increase as Gap opens fourth Irish store

Pre-tax profits at the Irish arm of US retail clothing giant Gap last year increased by 77% to €1.67m, the latest data reveals.

Boosted by the opening of the firm’s fourth store in Ireland last year, Gap Stores (Ireland) Ltd increased its revenues by 21% from €9.86m to €11.96m in the 12 months to the end of February 1 of this year.

In a post-balance event, the directors disclosed that the retail firm paid a dividend of €5m to its immediate parent, Gap (UK Holdings) Ltd in September of this year.

The firm’s pre-tax profits increased from €948,522 to €1.67m last year.

Numbers employed last year increased from 83 to 91, with staff costs increasing from €1.19m to €1.42m.

According to a note attached to the accounts, “the company has generated healthy profitability and a strong cash inflow from operating activities during the year. This trend has continued into 2014.”

The directors’ report states: “The level of business and the financial position at the financial year end were satisfactory and in line with the directors’ expectations.”

The directors state that, in March 2013, “the company successfully opened its fourth store in Ireland which is performing well against budget. Opportunities will continue to be sought to maximise profitability and market share in the Irish casual apparel market.”

Gap opened its first store in Ireland at Arnotts in 2006, before opening two more at the Dundrum shopping centre and Cork City in 2009, followed by a new 930 sq m outlet store in Blanchardstown last year.

The figures show that, at the end of December 2013, the firm had accumulated profits of €5.3m before the dividend of payout of last September. The firm’s cash increased from €3.27m to €5.28m last year.

The firm’s profits last year take account of non-cash depreciation costs of €331,732 while the firm also sustained rental charges of €1.02 4m during the year.

The figures show the growth of the firm last year resulted in the gross margin increasing from 51% in 2012 to 58% last year.

In 2013, Gap recorded a gross profit of €6.79m compared to €5m in 2012. However, a 30% increase in administrative expenses from €4.07m to €5.3m resulted in operating profits of €1.67m.