Brown Thomas posts a profit of €2.7m

UPMARKET IRISH department store group Brown Thomas recorded an 82 per cent fall in its operating profit last year as the company felt the effects of the recession on its bottom line.

Accounts for Carlow Investment Company and Subsidiaries, which were provided to The Irish Times, show the department store chain posted an operating profit of €2.7 million for the 12 months to the end of January 2010.

This compared with a surplus of €14.7 million for the previous year.

Sales at Brown Thomas, which has its flagship store on Grafton Street, fell to €203 million last year from €246 million in the previous period.

Brown Thomas, which is owned by billionaire Galen Weston and his family, incurred redundancy costs of €3.8 million last year.

But it received €3 million from sister group Selfridges Retail Ltd after entering into an outsourcing agreement with the British company.

This left it with an exceptional charge of €841,129. The retailer also made interest payments in the year of €548,007.

It received a dividend payment from Selfridges of €12.7 million, relating to a 22 per cent stake in the British retailer that it no longer owns.

This allowed the Irish department store group to record a pre-tax profit of €14 million for the year to the end of January last.

This compared with a pre-tax profit of €21.9 million a year earlier.

Brown Thomas also made an actuarial gain of €4.6 million on its pension scheme.

Commenting on the results, Paul Kelly, managing director of Selfridges Group Ltd, said its sales for the current 12-month period would be higher than last year as the performance of the business has recovered somewhat.

“The important thing for us is that we made a profit last year,” he said. “It was a very difficult environment.”

The company’s net operating costs declined by €4.4 million to €63.6 million last year.

Its wage bill fell by €26.7 million from €29.1 million while directors’ remuneration was down 7.7 per cent to €917,317.

Mr Kelly said the retailer would be employing an additional 150 staff for the busy Christmas period this year.

He said Brown Thomas would also be opening all of its stores on St Stephen’s Day – a first for the company. “It’s the biggest retail day in the UK,” he explained. “It’s the right thing to do. Lots of cities open on that day, why shouldn’t we?”

This follows a decision by many Irish department stores and fashion retailers to open on December 26th for the first time last year. This included Brown Thomas on Grafton Street.

Founded in 1849, Brown Thomas is part of the Toronto-based Wittington Investment Group, which also includes Selfridges and Holt Renfrew in Canada.

It has stores in Dublin, Cork, Limerick and Galway and three BT2 shops, which cater for younger shoppers. The company employs about 1,900 workers in Ireland.