Irish retailer Brown Thomas is planning to spend up to €9 million next year refurbishing the ground floor of its flagship department store on Grafton Street in Dublin.

"We're going to put in a new beauty hall, we'll have new beauty brands coming in and we'll be refitting our accessories," managing director Stephen Sealey told The Irish Times yesterday.

“It will refresh the ground floor and give it a lift and add to the offering in the store.”

The upmarket retailer also plans to invest about €850,000 to expand its online offering next summer.

Launched in October at a cost of about €600,000 with a range of beauty products, Brown Thomas plans to add handbags to its online range in February, followed by shoes, sunglasses and certain fashion items later in the year. It will also offer customers a “click and collect” service that will allow them to pick up their items in store.

Operating profit
"Our aim is to have about 50 per cent of the store available online by the middle of next year," Mr Sealey said.

Brown Thomas made an operating profit of €6 million on sales of €143.5 million in the 53 weeks to February 2nd, 2013, according to accounts just filed.

While sales rose by 2 per cent, its operating profit declined by 0.6 per cent when compared with the previous financial period, which was 52 weeks long.

On a like-for-like basis, sales rose by 3 per cent while its operating profit was 5 per cent higher, Mr Sealey said.

The accounts show that Brown Thomas paid a dividend of €5 million to its parent company, Selfridges. This was its first dividend payment in three years.

When interest charges were accounted for, Brown Thomas made a pre-tax profit last year of €6.2 million. The company paid corporation tax of €890,000 to leave it with an after-tax surplus of €5.3 million.

Brown Thomas increased its headcount by 17 to 801 last year with wages and salaries rising by 7.2 per cent to €25 million. Staff received a 2 per cent pay increase during the year, their first since 2008.

Directors’ emoluments declined from €1.5 million to €832,000 during the year.

Deficit
The accounts show that the deficit in the company's defined benefit pension schemes widened to €12.9 million from €8.7 million in the previous year. Mr Sealey said Brown Thomas has "reached agreement" with the trustees of the main scheme on a funding plan for the scheme, which is closed to new entrants.

Mr Sealey said current trading was “all right”, with November sales knocked by the controversy surrounding the payment deadline for the State’s property tax. “We weren’t helped by that quite frankly.”

He expects sales to rise by 3 or 4 per cent in the current year although a lot will depend on sales over the next two weeks.

While consumer sentiment has improved, Mr Sealey said this has yet to feed through to the retail sector. “I think we’ll get that next year. We’ll see a bounce.”

Mr Sealey declined to comment on Selfridges' involvement in the recent purchase of Ulster Bank's loans in department store rival Arnotts.