DEBENHAMS expects trading to remain challenging in Ireland this year as its latest accounts show its main Irish operations made losses of €12 million in 2010.
For the year to August 28, 2010, Debenhams Retail (Ireland) reported pre-tax losses of more than €12m. This compares with a profit of €6m in the previous year.
Turnover in the year was down from €188m to €170m at their Irish department stores.
Debenhams’ activities expose it to a variety of financial risks that include the effects of changes in funding and liquidity risk, credit risk and foreign exchange risk, according to the company’s accounts.
“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. For this reason, the directors believe it is appropriate to adopt the going concern basis in preparing these financial statements,” the accounts read.
Staff costs amounted to €50.8m compared with €41.9m in the previous year. Employee numbers fell from 1,826 to 1,803, as the company took a €10.6m hit on restructuring costs.
The company previously said the restructuring of the business in Ireland will “ensure that the business has the flexible and right-sized workforce that it needs for the future”.
During the year the company received a capital contribution in the form of a loan note of €46,493,574 from Debenhams Retail Holdings (Ireland).
“This capital contribution was used to repay the company’s balance due to Debenhams Retail Plc, a 100% fellow subsidiary of Debenhams Plc, the company’s ultimate parent company. A further capital contribution, in the form of cash totalling €8,999,990, was also received during the year from Debenhams Retail Holdings (Ireland) Limited,” the accounts read.
The directors do not recommend the payment of a dividend.
Debenhams, which entered the Irish market by acquiring Roches Stores in 2006 and now has 10 stores around the country, moved to cut around 170 jobs in its Irish division through a voluntary redundancy scheme last year.
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