Handbag sales boost Irish Gucci revenues to €3.9m

Revenues at the Irish arm of one of the world’s best-known luxury brands, Gucci last year tripled to €3.9m.

The sharp increase in revenues at Gucci Ireland Ltd was on the back of a successful new store opening at the Kildare Village in July of last year.

The 190% increase in revenues resulted in the firm returning to profit to record pre-tax profits of €41,336 in the 12 months to the end of February this year.

In 2015, it had posted a loss of €87,901.

The expansion of the business doesn’t point altogether to soaring demand by people here for Gucci handbags and other Gucci goods as the directors said: “A significant proportion of our sales performance is linked to the level of tourism in Ireland”.

The growth in sales last year followed a much more modest 3% sales growth in 2014.

The firm’s gross margin last year fell from 52% to 38%.

The opening of the new store resulted in the staff numbers at Gucci increasing from nine to 20 people.

Staff costs increased sharply from €189,314 to €455,440.

The profits take account of operating leases of €126,336 and non-cash depreciation costs of €164,291.

The firm last year had a gross profit of €1.5m and administrative expenses of €1.46m. On the firm’s future developments, the directors said that it continued “to work towards increasing our market share by focusing on the achievement of an organic growth on the existing store network, providing an excellent retail experience to our customers and optimising the merchandise available for sale.”

The firm’s cash pile last year increased from €137,599 to €268,655, while shareholder funds stood at €75,952.

The directors state that the key elements of the company’s strategy for growth is to increase its range of high end exclusive products and to strengthen its luxury positioning and enhance the image of its stores.

On the risks facing the company, the directors state that the company is “in a highly competitive market with changing customer preferences and in order to be successful, the brand’s collections need to remain appealing to its customers”.