Gap Ireland boosts profits

The Irish arm of US retail clothing giant Gap outperformed the firm’s global business last year as pre-tax profits increased to €863,215.

In the 12 months to the end of January 2016, sales and profits dropped at Gap’s global operations.

However, new accounts for the firm’s Irish operation, Gap Stores (Ireland) Ltd show that the company bucked the worldwide trend to increase profits though only marginally.

However, revenues dipped to €11.59m. In 2013, Gap opened its fourth store in the Republic which is a 930sq m outlet at Blanchardstown.

After launching at Arnotts, in 2006, it went on to open in Cork and at Dundrum Shopping Centre.

Gap in the US last year said it planned to close a quarter, or 175 stores in north America, after earnings fell.

“The level of business and the financial position at the financial year end were satisfactory and in line with the directors’ expectations,” the accounts said.

The directors said the firm would “maximise profitability and market share in the Irish casual apparel market”.

Staff numbers last year increased from 94 to 96, while staff costs grew from €1.39m to €1.43m. At the end of January, it had accumulated profits of €1.8m and cash of €932,128.

The firm’s profits last year take account of non-cash depreciation costs of €255,914, and increased rental charges.

Those expanded by more than €200,000 to €1.56m in the year.

It reduced its cost of sales last year to €4.9m, which meant gross profits rose to €6.6m from €6.5m in 2014.

However, it booked increased administrative expenses of €5.8m.

The directors state that the principal risk facing the business is its ability to gauge the fashion tastes and that it would lose out to fashion retail rivals.

“The company will continue to improve its core business by creating the right product and store experience, retaining and developing the best talent in the industry and examining the organisational structure to ensure that it effectively supports the business and meets customer needs,” according to the directors at the Irish firm.

Last year, Gap’s worldwide sales fell from $16.43bn (€15.78bn) to $15.79bn.