Redundancy costs of €10m pushed Debenhams Ireland into red last year

BRITISH FASHION retailer Debenhams slipped into the red in Ireland last year after incurring redundancy costs of €10.66 million.

Debenhams Retail (Ireland) Ltd made a loss after tax of €11.8 million in the year to the end of August 2010, its latest accounts show. This compared with a profit of €5.1 million in 2009.

This included exceptional costs of €10.66 million relating to a restructuring programme implemented last year, which resulted in 170 redundancies.

Debenhams’ turnover fell by 9.8 per cent to €169.8 million in Ireland as the effects of the recession continued to weigh on consumer spending. Stripping out the costs of its restructuring, Debenhams made an operating loss of €1.4 million compared with a surplus of €7.9 million in 2009.

The accounts show the company received a capital contribution of €46.5 million from its immediate parent group, Debenhams Retail Holdings (Ireland) Ltd, in the form of loan notes.

This was used to repay a balance owed to Debenhams Retail plc, a fellow subsidiary of Debenhams plc, the ultimate parent group for the Irish business.

The company also received just shy of €9 million in cash from Debenhams Retail Holdings (Ireland) Ltd. This resulted in Debenhams Retail (Ireland) Ltd closing the financial year with shareholder funds of €68.8 million, up from an opening level of €25.2 million. Debenhams has 11 department stores in the Republic, the majority of which it acquired from Roches Stores in 2006. It employed on average 1,803 staff here last year.

The company launched a dedicated Irish online shop last November. No comment was available yesterday from Debenhams in relation to its Irish accounts.

In April, Debenhams plc announced pretax profits up 4.5 per cent of £125.3 million for the six months to the February 26th. The retailer said it would recommence paying a dividend.

Debenhams also announced its chief executive Rob Templeman was stepping down after eight years at the end of the current financial period. He will be succeeded by deputy Michael Sharp.