THE Londis store chain is set to close around 5% of its Irish shop network this year in response to the continuing challenging trading conditions in the market.
ADM Londis — the chain’s Co Kildare-based holding company — yesterday reported pre-tax profits of €4.1 million for 2008 and a wholesale turnover of €341m.
The profit figure was down from a profit of €6.1m made in 2007. The decline was mainly due to a one-off exceptional charge of €2m, which included a €500,000 restructuring charge and an increase of €1.5m in the group’s bad debt provision.
The wholesale turnover figure was down by €30m — 2007’s €371m having been on the back of a landmark year for the business when turnover jumped by nearly 5%. Retail sales last year reached €707m — down from €761m.
ADM Londis chief executive Stephen O’Riordan said that despite the tough market conditions, 2008 still saw a “resilient” performance from the company.
“Last year was a watershed for Irish businesses. A contracting economy, weak consumer sentiment and a drying up of credit culminated in a very challenging year for an already competitive market. Notwithstanding the exceptional charges, the underlying profitability of the business remains strong, and with its low debt profile the group remains well-positioned within the marketplace,” he added.
However, Mr O’Riordan also said that Londis’ likely performance for this year will be largely unchanged on the 2008 figures. He told the Irish Examiner yesterday that pre-tax profits for 2009 will probably be flat, while any rise in group turnover is unlikely to be seen until late 2010.
Londis currently employs about 8,000 people in its retail, distribution and support services divisions. The company operates 350 stores around the country. Job losses this year — following five redundancies last year — haven’t been ruled out as the group’s main focus will be on cost management factors.
“The focus of all operators within the market in 2009 will be on cost management and delivering increased value for consumers,” Mr O’Riordan added.
Any purchase of new shops — only one, in Co Offaly, was carried out last year — will be dependent on property values and the flow of bank credit to the retail sector.
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