Blarney Woollen Mills may sell assets to reduce loan obligations

THE BLARNEY Woollen Mills Group may sell assets to reduce its loan obligations, accounts for one of its subsidiary companies reveal.

The company, which owns the Blarney Woollen Mills shops and the Meadows Byrne homeware chain, was in breach of some of its financial covenants at the end of the last financial year, according to accounts filed for Meadows and Byrne Malahide Road Limited.

Meadows and Byrne Malahide Road Limited is the only shop in the group for which accounts are filed. Because Blarney Woollen Mills Group is an unlimited company, it is not obliged to file accounts.

The accounts, which are for the year ended January 2011, state that the group’s principal bankers have consented to interest-only payments together with nominal principal payments where cash flows allow.

“The directors have also identified suitable core and non-core assets that may be disposed to reduce the group’s loan obligations without adversely affecting its trading activities”, the accounts state.

Blarney Woollen Mills closed its store on Nassau Street last year. It has stores in Cork, Killarney, Bunratty and Tipperary.

Blarney Woollen Mills is owned by members of the Kelleher business family, including Freda Hayes.

It merged with Meadows and Byrne – which was founded by Ms Hayes in the mid-1990s – in 2000, after Blarney Woollen Mills split from the Kilkenny shop following a dispute between members of the Kelleher family.

The auditors’ report for Blarney Woollen Mills, which has also been filed recently, shows that auditors KPMG cited material uncertainties that may cast doubt on its ability to continue as a going concern.

The auditors, who reported to the company on the financial statements on November 2nd, note in particular “the achieveability of the cash flow projections for the group and the key assumptions therein” and “the ability to restructure the group’s borrowings or obtain further covenant waivers on existing loans”.

Meadows and Byrne’s store in the CHQ centre in Dublin’s IFSC remains closed since October 27th after being “locked out” by its landlord, the Dublin Docklands Development Authority.

As reported in the Irish Times last week, Tipperary Crystal is considering converting the CHQ into a cultural centre, which may include a Riverdance “experience”, a genealogy centre, a crystal manufacturing centre and shops and restaurants.

Meadows and Byrne have opened a number of other stores this year around the country.

The accounts for Meadows and Byrne Malahide Road Limited show that turnover at its store in Clarehall north Dublin remained steady last year at just under €1.4 million.

The company made a pretax profit of €38,407 for the year ended January 2011, down from €146,075 the previous year.

Shareholders’ funds stood at €225,000 at the end of January, up from €187,000 the previous year.