Ireland’s TK Maxx chain profit rises to €5.5m in post-Covid surge

Clothing and home goods discounter TK Maxx saw its sales rebound in Ireland last year, with sales rising 36 percent to just under €200 million. Profits also increased from €401,000 in 2020 to €5.5 million in the 12 months to the end of January this year.

The chain is ultimately part of US-based multinational TJX, which operates stores around the world.

At the end of January the group operated 27 TK Maxx stores in Ireland and two Homesense stores. Of the sales in the past financial year, 191.5 million euros were generated in the TK Maxx branches and 8.7 million euros in the Homesense stores. Another TK Maxx branch was opened during the reporting period.

While the Covid pandemic continued to have the greatest impact on Irish operations during this period, the company has warned that Brexit has “significantly increased” the cost of doing business for the group in Ireland.

All TK Maxx merchandise sold in Ireland is sourced from a distribution center in the UK.

“Post Brexit the company continues to pay import duties and this has significantly increased the cost of doing business in the Republic of Ireland,” the Directors note in the latest Irish Branch Accounts.

“The additional regulatory and compliance requirements continue to increase costs, as do delays due to border controls, which continue to impact product flow in stores,” they add.

The financial statements show that the Irish operation has a comprehensive guarantee to the Revenue Commissioners of almost €6 million in respect of customs and deferral taxes.

Directors note in the accounts for Irish operations that its shops were closed 29 per cent of the time in the last financial year due to Covid restrictions. It said the closures had “significantly impacted” the company’s liquidity. In the last financial year, at the height of the pandemic, stores in Ireland were closed 46 per cent of the time.

The accounts indicate that €12.6million in government wage support used during the Covid crisis represented “valuable support” for the retail chain, allowing it to keep its staff employed and to increase during the pandemic pay. The chain has around 1,500 employees in Ireland.

The company also incurred ongoing costs related to health and safety protocols put in place due to the pandemic. These additional costs affected profitability. It said the pandemic had caused temporary store closures and reopenings in the 12 months to the end of January last year.

“The pandemic has had an impact on the Company’s results of operations, financial position, cash flow and consumer behavior,” the directors noted.

“The company also felt the impact of uncertainty about the duration of the store closures in accordance with local and national guidelines and the resulting uncertainty about the associated financial implications,” they added.

The Irish unit had retained earnings of just under €39m at the end of January.

Last month, the US parent company raised its sales forecasts as inflation-stricken consumers turn to the discounter for affordable clothes ahead of Christmas. Ireland’s TK Maxx chain profit rises to €5.5m in post-Covid surge

Fry Electronics Team

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