DIY retailer BQ Ireland slipped into the red last year as the company spent heavily on new stores and refurbishing existing outlets.
BQ, a subsidiary of Kingfisher, Europe's biggest home improvement group, recorded a loss of €1.6 million in the year to the end of February 2nd, 2008, compared with a profit of €2.9 million a year earlier.
BQ's turnover rose to €121.8 million from €116.6 million in the previous year. An interim dividend of €300,000 was paid by the Irish business to its parent group.
The directors' report described the trading performance as "satisfactory".
"In the forthcoming year, the company will remain focused on improving cost efficiency, development new product ranges, improving existing store environments, enhancing customer service and reinforcing price competitiveness in an effort to drive sales and improve profitability," it stated.
A spokesman for BQ said the DIY group spent €2.1 million on two new shops in 2007, in Galway and Waterford. It also did a full revamp of its flagship Liffey Valley store, which took 12 weeks to complete and affected the shop's sales and profitability.
In addition, BQ invested heavily in customer service and staff training last year.
He declined to comment specifically on trading in the current year.
"It's a tough environment but BQ is known for good value and we're concentrating on trying to do a good job for customers," he said.
BQ's Irish accounts show its cost of sales rose to €74.3 million last year from €70.1 million in the previous 12-month period.
Its "other" operating expenses increased by 15.4 per cent to €49.2 million. The group's interest costs declined sharply, to €15,060 from €371,064.
As a result of the profit decline, BQ's shareholders' funds stood at €12.7 million at the end of February compared with €14.5 million a year earlier.
Kingfisher and BQ have struggled over the past 12-18 months. Kingfisher recently said it did not expect any growth in the UK's DIY market over the next year. Its share price has more than halved over the past 18 months.
