Avoca profits hit by €4m restructuring charge ahead of sale

Avoca Handweavers ratcheted up more than €4 million in restructuring and related costs in its last full year ahead of its sale to US contract catering giant Aramark.

The food and lifestyle luxuries retailer, which was formerly owned by the Pratt family, employs more than 800 people across 12 locations in Ireland.

The company fell into the red in the 12 months to end January 2016, recording a €1.6 million pretax loss as against a €2.03 million profit a year earlier.

The loss was due primarily to the company recording restructuring costs of €4.2 million linked to additional pension contributions for directors.

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According to the accounts, Avoca employed 806 people in total during the reporting period, up from 758 a year earlier. Staff-related costs, including wages and salaries, rose to €25.2 million from €19.9 million with directors’ remuneration jumping to €5.5 million from €1.6 million due to a rise in pension contributions.

Textiles operation

Turnover increased by 2.7 per cent in the year under review to €60.4 million from €58.8 million but this was largely offset by a corresponding increase in the costs of food, merchandise, labour and overheads.

Avoca was established by former solicitor Donald Pratt, who founded the group as a textiles operation in the 1970s. Donald’s son Simon Pratt has continued his association with Avoca and now runs the business on behalf of Aramark. Other family members resigned from the company following the sale of the business.

However, another of Donald’s sons’ Ivan acquired the wholesale fashion and homeware business, known as Avoca Handweavers Designs, which has since been renamed as Mill Mount Weavers Limited.

The catering giant acquired Avoca for more than €50 million in a deal that was completed in November 2015. It told investors last August that Avoca generated sales of about $16 million in the first three months under new ownership. Aramark is eying further expansion for Avoca in both Ireland and the UK.