Losses at Irish Argos unit widen amid store closures

Costs associated with the closure of three Argos stores contributed to pretax losses increasing fourfold at the Irish arm of the retailer to €13.06 million this year as sales tumbled 21.5 per cent to €133.76 million.

New accounts show that Argos Distributors (Ireland) Ltd incurred €2.2 million in costs over the closure of the stores in the year to the end of March. The company said it had since closed one other store and approved the closure or a further three in the current financial year. These include the Argos outlets in Dublin’s Stephen’s Green Centre and Kilkenny.

That will bring the company’s Irish store portfolio down to 31 by the end of the current financial year, meaning the group will have shuttered almost one in five of its Irish outlets over two years.

Directors cautioned that they would “continue to review its portfolio of stores in light of the changing retail environment and the development of the company’s online offering”.

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In accounts signed off on November 21st, the directors state that they believe that, based on the profitability of the company and net current assets of €46.3 million, the company can continue to trade as a going concern.

Numbers employed by the group – which is owned by the UK-based J Sainsbury plc – fell more than 10 per cent to 754 from 843, though the firm’s full-time equivalent employee numbers increased from 448 to 471. Staff costs dropped to €16.2 million from €18.54 million.

The firm recorded an operating loss of €12.55 million. Interest costs of €509,000 brought that over the €13 million mark at the pretax level. Pretax losses at the business had been €3.2 million in 2021, chiefly due to a non-cash impairment of assets of €7.97 million.

At the end of March this year, the firm had shareholder funds of €242.82 million that included accumulated profits of €15.7 million. The firm’s cash reduced sharply from €26.75 million to €3.39 million.