VENERABLE DUBLIN retailer Clerys moved into the red last year as the slump in consumer demand knocked 10 per cent off its sales, writes CIARÁN HANCOCK,Business Affairs Correspondent
Clery Co made a loss of €308,613 in the 12 months to the end of January 2009, according to accounts just filed.
This contrasted with a profit of €1.66 million the previous year.
Its operating profit declined to €89,098 last year, from €1.48 million in the previous 12 months.
Clerys chief executive PJ Timmins said the current financial year had proved equally tough for the department store operator and he expected turnover to decline by a double-digit figure and for it to again be loss-making.
“In the current year it would be very hard to pull it back at this point,” Mr Timmons told The Irish Times.
“My objective is to be cash neutral next year [the 12 months to the end of January 2011]. At that stage we would have much better visibility. This year is going to see a significant decline.”
The company’s gross transaction value – which includes concessionaries’ turnover and VAT – declined to €69.2 million last year, compared with €76.9 million in the previous period.
The retailer, which operates from a landmark store on Dublin’s O’Connell Street, also recorded an actuarial loss of €1.45 million on its pension scheme.
When a deferred tax credit of €181,500 is accounted for, the company was left with total recognised losses for the year of €1.58 million.
Mr Timmins said big-ticket furniture items and luxury goods, such as designer handbags, had been most affected by the recession.
“The big-ticket items have been impacted in the last year, and home furnishings . . . There has been a significant reduction in consumer spending generally, and we would have seen a move away from the very luxurious items,” he said.
In a bid to reduce costs, Clerys has trimmed its trading hours and reduced the working week for staff from 39 hours to 33 hours, with related pay cuts.
Mr Timmins said pay cuts of between 3 per cent and 20 per cent had been introduced, while bonuses had been eliminated and sales commissions had been significantly reduced.
Clerys has also closed a 40,000sq ft warehouse in Newbridge, achieved reductions in rents at outlying stores in Leopardstown, Blanchardstown and Naas, and reduced its general overheads.
“Everybody has taken some pain,” Mr Timmins said.
To date, Clerys has not sought any redundancies, although staff who retired or left the business have not been replaced.
“There are no plans [for redundancies] at this point,” said Mr Timmins. “There’s no doubt we will have to cut our costs to suit the situation but we need to see how trading holds up over the next few months because this is [the time of year] where we started to see a dip last year.”
He said that if that pattern were repeated this year, “we’ll have to react”.
Mr Timmins said the company had broadened the instore mix at its suburban stores away from furniture to kitchen items, luggage and back-to-school clothing.
“My priority is to make sure they stay open,” he said.
The accounts show that dividends of €210,400 were paid to shareholders. The business is owned by several members of the Guiney family, which founded the store, and AIB, which owns about 19 per cent of the retailer.
The company’s net debt stood at €27.7 million at the end of January 2009.
