A|wear fashion chain reports 13% drop in sales last year

FASHION RETAILER A|wear suffered a 13 per cent drop in sales last year as the recession took its toll on performance.

Figures just posted at the Companies Office show the group’s sales fell to €56.2 million in the year to the end of February 2009, down from €64.5 million in the previous 12 months.

Operating profits declined by a greater margin, dropping by 20 per cent to €4.8 million over the same period. Pretax profits were healthier at €25.9 million, helped by €16.9 million in “other income” from the sale of a property to a “fellow group company”.

Profits were also boosted by a €4.1 million in “finance income”.

In a report accompanying the accounts, directors described the result as a “satisfactory trading performance”. They warned however that the group faced risks “typical to the retail sector”, citing increased competition in particular.

“These are mitigated, however, by the company’s historically strong financial performance and long-standing reputation and tradition within the sector,” the directors said.

Since being sold by Brown Thomas in 2007, A|wear has been owned by a group comprising its management and London investment house, Alchemy Partners.

That deal, which involved Alchemy taking a majority stake, was worth some €70 million and saw Annmarie Flood take up the role of chief executive.

The accounts say Alchemy owns 80 per cent of A|wear’s parent company, Maple TopCo. Nobody from Alchemy or A|wear was available to comment on the figures yesterday.

A|wear’s website shows the group has 30 stores in the Republic, five in the North and five in Britain. At the time of the takeover, it had 28 stores.

The accounts show staff numbers at the group fell substantially across the year, dropping from 429 to 369. All the cuts came from the sales side of the business. No dividends to shareholders were paid, while a payment of €18.8 million was made in the previous year.

A|wear paid rent of €466,000 to a related property management company during the year, while group companies also charged the firm €1.2 million in management fees. Management fees charged by A|wear to related companies amounted to €186,000.

Group companies meanwhile owed A|wear €27.8 million at the end of the year, up from €3.1 million 12 months previously. A|wear did not owe anything to other members of the group.