IT WAS supposed to play a starring role in a bold global expansion but, six years on, Harvey Nichols’s Dundrum store continues to be a drain on the resources of its parent company.
Latest accounts for Broad Gain (UK) Ltd, the private company that controls the upmarket department store group, show that it booked an impairment loss of £1.42 million in relation to the value of its assets in Dundrum last year.
The net liabilities of the Dundrum store also widened to €9.43 million in the year to April 2nd 2011 from €6.7 million a year earlier.
These liabilities are “irrevocably guaranteed” by Broad Gain, the accounts add.
“Due to the very weak economy in Ireland, the group has faced tough trading conditions in this market and the board is of the view that its recovery plan will take longer to achieve than previously anticipated but it is committed to continue to invest resources for the long-term success of the store,” the directors’ report states.
No comment was available from the Dublin store. Questions submitted to its press office in the UK went largely unanswered.
The company did say it was “fully supportive” of the Dublin store and anticipates that “recovery for this area of the business will take time, but [it] is committed to continue to invest resources for the long-term success of the store”.
Harvey Nicks, as it is known, began trading in Dundrum in the autumn of 2005, some months after developer Joe O’Reilly’s town centre had opened amid a blaze of publicity.
It comprises fashion retail, a cafe, a restaurant and bar, and a food shop.
The store had hoped to cash in on the Celtic Tiger boom and the seemingly insatiable appetite among Irish people for expensive fashion brands.
However, the economy crashed in 2008 and the retail sector here has been in the doldrums ever since.
The latest blow came with a rise in the rate of VAT to 23 per cent on January 1st.
There was better news elsewhere for Harvey Nicks. The group made a profit of £17.2 million last year, up from £12.6 million in the previous period.
Its turnover rose by 2.4 per cent to £171.8 million. The company traded from seven shops in the UK and five overseas last year.
