Some 230 Eason shareholders are to share a €20 million payout this autumn from the disposal of a number of properties over the past 18 months but the sale of three other sites, including its flagship store on O’Connell Street in Dublin, has been delayed due to the impact of Covid-19 on the economy.
The Irish-owned retailer has also decided that its seven shops in Northern Ireland will not reopen following the easing of social distancing restrictions there.
Eason has entered a consultation process with the 144 staff impacted by the decision. Its revenues from Northern Ireland have declined by about 30 per cent since 2016, with accumulated losses of €2 million recorded.
In addition, Eason has reduced its headcount in the Republic by 150 in response to the impact of the Covid-19 lockdown on its bricks and mortar business. This included 100 redundancies of staff with fewer than two years of service. It is expected that this will achieve annual savings of €2 million for the retailer, which had to shutter its 36 shops from March 24th to June 8th, and is part of a wider plan to achieve annual cost savings of 30 per cent.
These details emerged in letters sent to shareholders to update them on results for the year to the end of January 2020 for the retail and property businesses, which operate separately from each other.
Eason had planned to sell €60 million worth of properties by the end of this year, and to distribute this money in a tax efficient way to shareholders.
Eason chairman David Dilger said the pandemic had placed a "question mark over the timing of completion of the disposal of these properties" for their full value during either 2020 or 2021.
In addition to O'Connell Street, Eason is selling its store in Blanchardstown Centre and an investment property in Athlone. These had been expected to fetch about €40 million between them pre-Covid. The stores are all being sold on a sale-and-lease-back arrangement.
‘Utterly changed’
Mr Dilger also outlined the challenges facing the retail business due to the impact of the pandemic. “This singular unprecedented event has utterly changed everything at an economic, business and social level and it will take a number of years to establish the new normal across all fronts,” he warned. “Furthermore, I have no doubt that if the economic challenges post-Covid continue to develop and if we experience a re-emergence of the virus, further robust action will be required.”
On a positive note, Eason generated €4 million in online book sales during the lockdown, and ecommerce revenues are 170 per cent ahead in the year to date.
In the 12 months to the end of January, Eason’s turnover was unchanged at €129 million while its operating profits rose to €600,000 from €100,000 a year earlier.
Mr Dilger described it as a “satisfactory” performance in a “very competitive and challenging retail environment” and given the various headwinds facing the business, including Brexit.
