One of the country’s best known fashion brands, Magee, has introduced a redundancy programme in response to “a Covid-19 induced drastic drop in sales revenue”.
The redundancy programme was introduced late last year and, according to Magee Clothing chief executive Rosy Temple, revenues across its bricks and mortar, weaving, clothing, wholesale and retail sectors decreased by approximately 60 per cent in 2020.
Ms Temple stated that online sales “were the exception to this and saw positive growth”. She added that the last year “has been undeniably tough going, as it has been for the majority of manufacturers and retailers in the textile and clothing sector”.
She continued: “However, as CEO of Magee Clothing and part of the fifth generation in the business, and along with a highly skilled and committed workforce, I am now excited to look to the future and growth of the Magee 1866 brand”.
Ms Temple made her comments on the Covid-19 impact when commenting on new accounts for the Magee brand’s Donegal Bay Group which show that the group recorded pre-tax losses of €502,590 in 2019, as compared with pre-tax losses of €358,141 in 2018.
The 2019 loss followed revenues decreasing by 9 per cent from €15.5 million to €14.14 million to the end of December 2019.
The accounts show that a large contributor of the 2019 pre-tax loss was a €267,302 exceptional cost associated with the business transferring operations out of Northern Ireland to its Donegal HQ in response to Brexit.
The directors said the group has faced “significant challenges” as a result of Covid-19 with the pandemic having “a significant impact” it.
The directors said the group’s trade has been impacted with the closure of its retail outlets for a number of weeks in the second and final quarters of 2020.
A note attached to the accounts said that since year end, the group’s management accounts “record a decrease of €760,000 in asset value for impairments to stock, debtors and investment properties due to Covid-19”.
The directors said the group has introduced a redundancy programme for certain divisions while discretionary spending has been suspended.
They said that in response to Covid-19, they completed a strategic review and business plan for the company’s operations.
The accounts confirm that Government supports were availed of while the group secured additional banking facilities and further investment from Enterprise Ireland.
The directors said “these measures have secured the viability of the group in the short to medium term”.
Ms Temple said “the Covid-19 induced drastic drop in sales revenue forced the company to go undergo some restructuring”, and that while Government support schemes were welcome, “Magee is keen to see a re-opening roadmap in Ireland”.
She said: “The company is hopeful that the staycation market will return in force this summer.”
The accounts show that the business recorded an operating loss of €73,747 before the exceptional cost of €267,302 concerning the transfer of operations from Northern Ireland and interest costs of €161,541 are taken into account.
The loss also takes account of non-cash depreciation costs of €243,337.
Numbers employed by the group in 2019 declined from 122 to 118, and staff costs declined marginally from €4 million to €3.9 million.
At the end of December 2019, the group had shareholder funds of €5.32 million that included accumulated profits of €3.6 million.
