Discount clothing and homewares retailer TK Maxx saw its sales in Ireland stage a recovery last year, with turnover rising 36pc to just under €200m. Its profits also surged, from €401,000 in 2020 to €5.5m in the 12 month to the end of January this year.
he chain is ultimately part of the US-based TJX multinational, which operates stores around the world.
As of the end of last January, the group was operating 27 TK Maxx stores in Ireland and two Homesense outlets. Of its turnover in the last financial year, €191.5m was generated at its TK Maxx outlets, and €8.7m at the Homesense stores. One additional TK Maxx outlet was opened during the period.
While the Covid pandemic continued to have the biggest effect on the Irish operation in the period, the company has warned that Brexit has “significantly increased” the cost of the group doing business in Ireland.
All the TK Maxx merchandise sold in Ireland is sourced from a distribution centre in the UK.
“Post Brexit, the company continues to pay import customs duties and this has significantly increased the cost of doing business in the Republic of Ireland,” directors note in the latest set of accounts for the Irish arm.
“The additional regulatory and compliance requirements continue to increase costs, as do delays due to controls at the border which continue to affect the flow of products into stores,” they add.
The accounts show that the Irish operation has in place a near €6m comprehensive guarantee in respect of duty and deferment taxes to the Revenue Commissioners.
The directors note in the accounts for the Irish operation that its stores were closed for 29pc of the time during the last financial year due to Covid restrictions. It said the closures “significantly impacted” the company’s cash position. In the previous financial year, at the height of the pandemic, its outlets in Ireland were closed for 46pc of the time.
The accounts point out that €12.6m in Government wage supports used during the Covid crisis provided “valuable support” for the retail chain, enabling it to continue to employ and pay its employees during the pandemic. The chain has about 1,500 staff in Ireland.
The company also incurred continuing costs associated with health and safety protocols introduced because of the pandemic. Those extra costs affected profitability. It said that in the 12 months to the end of last January, the pandemic led to temporary closures and reopening of stores.
“The pandemic had an impact on the company’s results of operations, financial position and liquidity, as well as consumer behaviour,” noted the directors.
“The company also felt the impact of uncertainty regarding the length of time stores were closed in accordance with local and national guidelines and the resulting uncertainty over any associated financial impact,” they added.
The Irish unit had retained earnings of just under €39m at the end of January.
Last month, the US parent raised its sales forecasts as inflation-hit consumers turn to the discount operator for affordable clothing ahead of Christmas.
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