Losses rise by 21% at Debenhams Irish division

Pre-tax losses at the Irish arm of UK retailer, Debenhams last year increased by 21% to €8.4m, new figures show.

According to accounts just filed by Debenhams Retail (Ireland) Ltd, the firm recorded the increased losses in spite of revenues increasing marginally from €162.1m to €163.5m in the 12 months to the end of last August.

The chief factor behind the increased losses was the firm’s net interest payable and similar charges jumping from €197,000 to €2.42m. The jump in those costs arose from a loss of €2.2m on foreign exchange transactions. The directors state that the external environment for Debenhams in Ireland is expected to remain challenging in 2015.

The company operates 11 department stores in the Republic — the majority of which it acquired from Roches Stores in 2006. The firm operates stores in Dublin and in Cork along with ones in Limerick, Tralee and Waterford.

The firm paid a dividend of €54.8m in 2013 and did not pay any dividend in 2014. Its cost of sales totalled €163.1m, last year, and distribution costs of €3.8m and administrative expenses of €3m increased the firm’s losses. The new accounts also show that the firm recorded an operating loss of €6.18m in 2014 and this represented a 13% drop on the operating losses of €7.09m generated in the previous year.

Meanwhile, numbers employed by the firm last year reduced by 90 from 1,771 to 1,681 with employment costs reducing from €35m to €33.9m. The accounts show that the provisions for promotional activities last year totalled €2.1m.

Last year’s loss takes account of combined non-cash amortisation and depreciation costs of €5.9m; made up of €5.4m in depreciation and €419,000 in amortisation costs. The firm’s spend on operating lease rentals last year reduced marginally from €25.37m to €25.24m, while its shareholder funds totalled €1.67m.

Addressing the firm’s going concern status, the directors state that after reviewing current performance and detailed forecasts, taking into account available bank facilities and making further enquiries as considered appropriate, the directors are satisfied that the company has reasonable resources to enable it to continue in business for the foreseeable future.