Auditor issues 'disclaimer' to reports on Shaws retail chain

AUDITORS TO the two main companies that comprise the family-owned Shaws retail chain issued “disclaimer” opinions to their reports because of issues relating to the valuation of property assets.

BMN Associates in Blackrock said that because of the “absence of a professional valuation” on property assets, it was unable to form an opinion as to whether the financial statements of the two entities gave a “true and fair view” of the companies’ affairs and had been properly prepared in accordance with the companies acts.

The disclaimer relates to Shaw and Sons Ltd, which runs seven department stores; and W G Hadden Ltd, which runs four shops and Hadden’s Shopping Centre in Carlow.

An interim property valuation was to have been carried out in January but Shaws decided the results would be “unreliable” given the current market turmoil, the accounts state.

The properties in the two companies had a combined carrying value on the books of €35.7 million. The disclaimer is highly embarrassing for the retailer, which was founded in Laois in 1865 by Henry Shaw.

They posted a combined €6.9 million in losses in the 12 months to the end of January 2010, reflecting a double-digit percentage drop in sales, actuarial losses on defined benefit pension schemes and writedowns on property assets.

Turnover at Shaws fell by 12 per cent to €23.6 million last year while it recorded a total loss of €4.8 million. At W G Hadden, turnover fell by 13.7 per cent to €15.7 million. It made a total loss of €2.1 million, which was related to property charges. Neither company paid a dividend last year.

Shaws – famous for its “almost nationwide” advertising slogan – hit the headlines in July when The Irish Times revealed that Sheila Shaw and her family had decided to sell their near 30 per cent stake in the 135-year-old business. This move created tensions within the family-owned company, which is led by Ms Shaw’s nephew Jonathan Shaw. It is believed that this standoff continues in spite of extensive talks taking place since July between the two sides.

The Irish Times understands that Ms Shaw, who is in her 80s, and her children are now prepared to sell to a third party. Informed sources said one “tentative” approach from a third party for her stake has been received.

Two of Ms Shaw’s five children work in the business. No comment was available from Jonathan Shaw yesterday.