TRADING AT Dublin department store Clerys worsened during 2011, exacerbating losses incurred by the retailer last year.

“Further operational changes” will be necessary, the company said yesterday. Accounts for Clery & Co (1941) plc show losses increased to about €2 million in the 12 months to the end of January, compared to €1.87 million in the previous year.

Turnover, including income from concessions operating in the store, fell 15 per cent to €21.9 million in the period. The gross transaction value of sales, which includes income earned by concessionaires and VAT, fell 8 per cent to about €47 million. The retailer is due to repay bank loans of €20 million in the new year.

In a statement issued yesterday, Clery & Co said it had “made and continues to make significant cost savings” and would seek “further efficiencies throughout all aspects of the business”.

Strict cost control last year, including the introduction of a four-day week, helped narrow operational losses by €216,000 to just under €1.2 million. Operating expenses fell 13 per cent, while stocks fell almost 10 per cent.

However, the company has been obliged to enter negotiations with its lender, Bank of Ireland, to secure ongoing working capital, as well as capital to fund its operational changes. The retailer confirmed it had secured working capital from Bank of Ireland, “which has been and continues to be very supportive”.

Bank loans totalling €20.17 million are due to mature in February 2012 and remain under negotiation, the spokesman said, adding that Clerys was “working very closely” with the bank. The company secured a new term loan of €4 million last year.

The group had shareholders’ funds of almost €4 million as of the end of January, the accounts show, down from €5.6 million the previous year.

Christmas trading is expected to be better than last year, when sales were hit by snowy weather. But although trading “improved considerably” in the January sales period, the recovery was “no substitute in volume or margin terms” for the lost pre-Christmas trade.

This set the tone for a “challenging” 2011, with Clerys directors citing the impact of a sharp contraction in the economy.

The retailer’s statement yesterday adds that trading conditions are expected to remain “very challenging” and in the medium term, while the reduction in staff working hours continues and “will be constantly under review”.

The company employed an average of 224 people last year, down from 236 the previous year.

Clerys has added concessions in a bid to reverse the fall in sales. Fashion brand Mango, confectioners Oatfield and Benetton Childrenswear have all opened in Clerys on O’Connell Street.