Pre-tax profits at the Irish arm of clothing retail giant H&M more than doubled to €720,667 in 2023.
New accounts show that profits increased at H&M Hennes & Mauritz (Ireland) Ltd as revenues rose by 81% from €62.53m to €113.2m in the 12 months to the end of November 2023.
The sharp rise in revenues arises from the firm treating the recognition of online sales differently as during 2023 the company retained the full online sales of €41.84m compared to the prior year when commission was recognised only.
The directors state that “although revenue for stores has decreased by 1%, the increase in revenue is driven by the change in recognition in online sales”.
In March of last year, H&M opened a new flagship store at Clery’s Quarter in Dublin .
The directors state that the business “performed well in FY23 considering the challenging retail environment and the robust economic outlook”.
The directors state that “the increase in profitability can be attributed to the new online business model and in part to optimisation of cost structure and streamlining processes”.
H&M Hennes & Mauritz (Ireland) Ltd recorded a profit after taxation of €175,997 after incurring a €544,670 corporation tax charge.
The company operates 22 stores across the country,15 H&M stores, one & Other Stories store and six COS stores.
The directors state that the key business risks and uncertainties affecting the company relate to volatility in the ongoing market conditions, competition and decrease in overall consumer confidence following the impact of inflation and increase in cost of living.
They also state that they have taken a number of steps to secure future profitability for the company considering increasing costs due to inflation, by continuing to invest in refurbishments to modernise the store portfolio and an ongoing review of the cost base and initiating cost-saving actions.
They state that customers “are looking for a smooth, simple, and inspiring experience in which stores and online interact and enhance each other”.
“Omni-channel offering forms a core component of the Company’s future development strategy,” the directors added.
Staff numbers in 2023 increased from 418 to 474 as staff costs rose from €9.7m to €10.54m. Directors’ pay totalled €114,910.
The profit for 2023 takes account of non-cash depreciation costs of €6.25m and rental costs of €3.96m. The company received unspecified other operating income of €325,801 in 2023 compared to €1.1m under that heading in 2022.
At the end of November 2023, the firm had shareholder funds of €15m that included accumulated profits of €8.66m.
Reporting by Gordon Deegan
