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H&M are looking to grow their presence in Ireland despite rising costs, affecting profits

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The directors of the Irish arm of H&M, the retail clothing giant, are looking to expand their reach by uplifting and rebuilding their portfolio, beginning with Liffey Valley in Dublin and Cork.

Accounts for H&M Hennes & Mauritz (Ireland) Ltd reveal that despite an increase in revenue of €2.08 million, pre-tax profits dropped by 46% to €689,776 due to higher costs in 2021.

The Swedish headquartered retailer’s gross margin decreased by 8.5% due to the cost of sales rising by 41%. Post-year end in May 2022, a dividend of €2.5 million was issued to their sole shareholder, H&M Hennes & Mauritz GBC AB.

Their services have been improved by the introduction of ‘click and collect’ and a new membership programme in late 2022. The directors are confident that the company can maintain growth in a competitive market and will continue to search for new store locations and refresh their product range.

Despite one store closure, the 4.5% increase in revenue has made H&M Hennes and Mauritz Ireland a profitable business. The easing of lockdown restrictions has seen the stores perform well, with customer demand met.

To safeguard their financial position during the pandemic, assistance from Government schemes was taken, as well as an active management of liquidity risk. The company’s supply chain, which is entirely within the group, was able to adapt to the changing external market conditions.

Staff costs in 2021 increased by 3.5% to €8.43 million, while ‘other operating income’ of €264,054 was also achieved. The profit for 2021 takes into account depreciation costs of €9.13 million and lease costs of €2.65 million. At the end of November 2021, the firm had shareholder funds of €15 million, including accumulated profits of €8.43 million.

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