Losses mount at Debenhams’ Irish stores

Losses widened at the Irish arm of British retailer Debenhams last year, largely due to the weakness of the euro against sterling.

Accounts for the year to the end of August 2014, which were recently filed by Debenhams Retail (Ireland) Ltd, show losses increased from €6.97 million in 2013 to €8.49 million. This follows a pre-tax profit of €7.8 million in 2012.

The company, which operates 11 department stores in the Republic, said it expected the commercial environment to remain challenging this year.

The latest filings show the company took a €2.2 million charge arising from foreign exchange volatility compared to a hit of €197,000 in 2013.

Revenues at the company rose slightly last year from €162.1 million previously to €163.5 million while the cost of sales remained stable at €163.1 million.

The latest filings show there was no dividend paid to the company’s parent last year. In the previous year, a dividend of €54.8 million which was paid to the gorup parent.

The firm reported an operating loss of €6.1 million as against a loss of €7 million in 2013.

Debenhams, which employs nearly 1,700 people locally, entered the Irish market in 2006 by acquiring the leases for nine Roches Stores for €29 million. The group operates 240 stores across 28 countries.

Debenhams announced on Friday that it has appointed industry veteran Terry Duddy, as a non-executive director.

Mr Duddy (59) was chief executive of Home Retail, Britain’s biggest household products group and parent of the Argos chain, for eight years before quitting last year.

Debenhams, Britain’s second largest department store, has had a tough time in recent years, with a profit warning at Christmas 2013 and disappointing trading at Christmas 2014 adding to the pressure on chief executive Michael Sharp, whose strategy has come under scrutiny.

The firm will report interim results on Thursday next.