The Irish arm of Argos has been hit with a €43.4m cost arising from the decision earlier this year to shut its store network here.

Last June, Argos shut down its Republic of Ireland operation after concluding the investment required to make its operation here profitable was too large to be viable. This led to the loss of 580 jobs.

New accounts filed by Argos Distributors (Ireland) Ltd show that the retailer recorded closure costs of €43.4m, including redundancy costs of €23.2m.

Eligible workers were offered an “enhanced redundancy package” where employees received an additional four weeks’ pay per year of service on top of statutory redundancy requirements. This brought the total redundancy package offered to six weeks pay per year of service.

The small proportion of staff not eligible for redundancy under Irish law were offered a one-off goodwill payment.

The costs to Argo also included closure provisions of €7.03m and write-down of leased assets of €9.8m, as well as €1.6m in write-downs of property, plant and equipment and €1.73m in consultancy costs.

The firm, which is owned by the UK based J Sainsbury plc, recorded a pre-tax loss of €24.1m for the 12 months to March 4, almost double the €13.06m pre-tax loss recorded in the prior year.

However, the company reported a €29.96m gain on the €227m sale of its investment in the Home Retail Group (Finance) LLP to Argos Ltd during the year.

Home Retail Group (Finance) LLP acts principally as a financing and investment holding business.

During the retailer’s financial year, revenues at the Irish unit declined by €12.8m to €120.95m, while the number of stores operating reduced from 35 to 34.

The number of stores in operation in June this year totalled 30 and directors stated that all stores were shut by June 24.

They added that “lease exits are in the process of being negotiated and will run till the end of their term.”

The directors said that it is currently addressing “outstanding legal and regulatory obligations as part of the winding down process.”

Staff costs in the period declined from €16.2m to €14.48m as numbers employed reduced from 754 to 612. This included 450 part-time and 162 full-time staff.

The loss also takes account of non-cash depreciation costs of €3.22m.

Shareholder funds on March 4 totalled €215.77m, while the business’s cash funds decreased from €3.3m to €2.57m.

Reporting On:independent.ie