Pretax profits in the Republic's franchise of the Habitat group fell by 60 per cent to €95,913 from €239,463 in the year to March amid difficult conditions in the furniture business, newly filed accounts reveal.
Turnover in the Republic of Ireland operation grew to €8.5 million from €6.9 million, but the franchise owner, Malcolm Brighton, attributed the rise to the opening of a new store last October in Galway.
Trading in its original Dublin store, now closed after a move to a bigger outlet, was "not as good as it had been", he said.
Mr Brighton added that the investment in the Galway store was instrumental in the fall in profits at his company, Conai Designs (Ireland), as it was reflected in administrative expenses of €3.98 million, up from €3.2 million.
He said that separately filed accounts for his Conai Designs (NI) company, which runs a Belfast store, show that it recorded post-tax losses of £160,000 (€235,823) on sales of £1.5 million in the period to March since it opened in August 2004.
Mr Brighton bought the Irish franchise in April 2002 from Ikano, the foundation that owns the commercial interests of Ikea founder Ingvar Kamprad and his family.
The deal was valued at the time at €5 million-€6 million. Mr Brighton worked with Habitat for more than 25 years before the takeover and was then head of the buying and design operation.
His company spent €2.5 million on the new Dublin store that occupies a former Bank of Ireland building that links Suffolk Street with College Green.
The move last August came after he surrendered the lease on its first Dublin store at St Stephen's Green.
This followed expenditure of €1.7 million on the Belfast store and a spend of €1.2 million on a Galway store.
"The new store is going reasonably well," he said of the Dublin operation. "Galway is not trading at the anticipated level. Neither is Belfast."
While furniture is "not an easy market", he believes that the prognosis for these outlets is good.
"The story is, a lot of investment is going back into the business and a small profit is being made. We need to make these stores work."
The Conai Designs accounts show that the company paid out a dividend of €53,000 last year, as gross profit grew to €4.15 million in the year to March from €3.55 million in the previous year.
With operating profits falling to €83,018 from €245,851, the company finished the year with retained profits €32,485 higher at €593,812.
The operating profit was stated after staff costs of €1.24 million, up from €996,081. Conai Designs (NI) owed the Republic of Ireland company €1.3 million at year-end.
