Arnotts department store in Dublin, which was acquired by Galen Weston's Selfridges Group in November, made an operating profit of €159,000 in the year to the end of January 25th, 2015, according to accounts just filed.
This compared with a profit of €8.8 million in the previous 12-months, a figure that was flattered by a once-off exceptional gain on its pension scheme of €9.9 million.
A property writeback of €7.5 million, offset by a €3 million provision for the guarantee of group bank loans and net interest payments of €973,000, resulted in Arnotts Ltd closing the year to January 2015 with a pre-tax profit of €3.6 million.
Turnover rose by 2.7 per cent to €114.2 million with the company stating that it benefitted from “improved awareness” of both the Shoe Garden and the Jewellery Hall, both of which had been refurbished.
Debts sold
The company invested €2.5 million in capital projects during last year and also launched its Wonder Card loyalty scheme.
“Consumer confidence continues to be positive in 2015 as spending levels continue to improve,” the directors’ report states.
The directors for the year were chairman Nigel Blow and chief executive Ray Hernan
For the first four months of this financial year, Arnotts was effectively controlled by the liquidators for Irish Bank Resolution Corporation and Ulster Bank. Its debts were sold to US group Apollo and Noel Smyth's Fitzwilliam Finance Partners in May 2014.
In September 2015, Fitzwilliam bought out Apollo and this was followed two months later with Selfridges Group acquiring the store.
Fitzwilliam has retained ownership of neighbouring properties that were earmarked for the Northern Quarter retail development, and the Arnotts car park. It also took charge of Boyers, which it is closing.
Boyers business
The accounts for Arnotts Ltd exclude the Boyers business.
Arnotts Ltd closed the financial year with net liabilities of €280 million, due largely to cross guarantees given to its parent entity, Arnotts Holdings Ltd, which has been renamed Fitzwilliam Real Estate Developments Ltd.
The inter-company loan guarantees were released in October 2015, the accounts state. Arnotts Ltd’s acquisition by Selfridges Group the following month increased its net asset position of €324 million.
“However, a net current liability position remained following the restructuring,” the directors’ reports states.
Donald McDonald, the new managing director at Arnotts, said the takeover by Selfridges had been “well received” by customers, employees and suppliers. “Sales are well ahead of last year,” he said.
Selfridges Group, led by Irishman Paul Kelly, confirmed that it will communicate its plans for the development of the Arnotts business in 2016.
