IRISH-OWNED retailer Eason is planning to invest €20 million over the next three years to reposition the company within the book trade, which has been hit hard during the recession.
The Irish Timeshas learned that this will be combined with a restructuring of the business aimed at reducing its cost base by €8 million a year.
Eason’s losses halved to €10 million in the 12 months to the end of January 2010, while turnover was down on a like-for-like basis.
Managing director Conor Whelan said that the cost reduction programme would probably involve job cuts.
“It is likely to include both voluntary and compulsory redundancies,” he explained.
He said that the savings would address the companys uncompetitive cost base and would be subject to a consultation process with staff.
Mr Whelan declined to put a figure on the likely reduction in headcount – Eason employs just under 1,000 staff – but he said that the cost reductions would not involve a “store closure programme” although some of its 60 shops might be deemed to be unviable.
“I want to maintain as much of the store network as possible,” he said. “We will look at it on a case by case basis, as we always do.”
Eason is Ireland’s biggest book store and plans to open three franchise stores in the near future at Balbriggan, Co Dublin; Mullingar in Westmeath and in Carlow.
“We will look at opening more new stores,” Mr Whelan added.
He said that the €20 million investment programme would involve the renovation of a number of its shops; new IT systems; changes to its core in-store category offerings, an upgraded online retail presence and a new marketing and brand strategy.
It will also restructure its bank debt.
Mr Whelan declined to specify the changes, but confirmed that it was looking at launching a loyalty card and at selling e-books online. Eason’s internet shop was founded in 1998, but Mr Whelan said that it needed to be upgraded.
“We have a basic catalogue [online] at present and we need to significantly upweight this offering,” he explained.
Shareholders were informed of management’s plans on Monday evening at the company’s head office in St Margaret’s Road, Co Dublin, while staff were briefed yesterday.
Eason’s turnover amounted to €193 million last year. The company said that its losses were attributable to discontinued operations, large-scale writedowns and impairments in its property portfolio.
The family-owned retail and wholesale operator last year appointed three outsiders to non-executive positions, with James Osborne, a former managing partner of AL Goodbody Solicitors, taking over as chairman.
Eason is majority-controlled by five families who trace their roots back to the founder Charles Eason. It has about 200 shareholders in total.
Book retailers have seen their sales decline sharply in the recession. This has resulted in a number of store closures, including the Waterstone’s shops at the Jervis Centre and on Dawson Street in Dublin, which closed in February.
Waterstone’s Irish business made a loss of €8 million in the year to the end of April 24th, 2010.
