PHONE RETAILER Carphone Warehouse made a pretax loss of €9.5 million in the year to April 2009, a period in which its turnover slipped and its rents increased.
Turnover slipped 2.4 per cent to €111.3 million, as the impact of a nationwide drop in consumer spending cancelled out the boost provided by the launch of Apple’s iPhone.
The performance over the period compares to a pretax profit of €1.9 million in the previous year.
Carphone Warehouse’s Stephen Mackarel said the poor trading environment had been a factor in the losses, which he said was also the result of restructuring charges and high rents.
“Some landlords are still looking for increases in rents,” said Mr Mackarel, who is a member of the working group set up by the Government to tackle the issue of high rents in the retail sector.
Mr Mackarel said Carphone Warehouse was “committed to Ireland for the long term” and was one of the few retailers still expanding here.
However, a dispute with Joe O’Donovan, the landlord of the Wilton Shopping Centre in Cork, remains unresolved. The landlord has sought a rent increase on Carphone Warehouse’s Wilton outlet.
Carphone Warehouse is now paying its rent on the property into an escrow account, in a bid to force the landlord to negotiate.
Rents paid by Carphone Warehouse amounted to €5.8 million during the period to April 4th 2009, up from €4.6 million the previous year. The company also made a €1.25 million restructuring provision relating to Best Buy’s purchase of a 50 per cent stake in its parent company, which took place in May 2008.
Operating expenses increased 14.7 per cent to €32.4 million, while the cost of sales also rose. The operating loss was €8.5 million, compared to a profit of €2.7 million in the previous period. As of April 4th, 2009, the company had accumulated losses of €14.2 million.
Mr Mackarel said the new generation of smart phones had performed well in its stores since the launch of the iPhone in March 2008. Once the initial stock issues – when demand exceeded supply – were resolved the iPhone became “a huge success” for the retailer, he said.
Carphone Warehouse, which now has 76 stores in Ireland, is due to open a new store in Cavan later this month: “When the Cavan store opens, we will have a store in every county,” Mr Mackarel said.
