The owner of the Pamela Scott fashion chain wrote off €2.7 million in loans owed to him as the group sought to deal with the impact of the Covid crisis and changes in shopping habits.
Liquidators were appointed late last year to two related companies that operated 13 Pamela Scott and Richard Alan stores across the Republic. The retail chains are owned by Sean Barron’s Flairline Fashions.
Newly filed accounts for Flairline show Mr Barron, who had provided a €3.4 million loan to the group, forgave €2.7 million of it so that he was owed just €730,000 at year-end.
The move came as the group saw revenues more than halve from €19.5 million in 2019 to €8.7 million a year earlier.
Flairline ended the year with net liabilities of €3.7 million as full-year losses fell from €261,349 to €235,069.
In a note included with the accounts, directors said while its online offering traded well during lockdown, it couldn’t make up for the losses arising from the closing of stores during the Covid crisis.
“As for many businesses in the retail sector, the group has been severely impacted by the Covid-19 pandemic. Due to Government-imposed restrictions to curb the spread of the virus, the group’s high street retail operations were closed for a significant portion of the financial year,” they said.
Flairline said it increased investment in its online offering during the year under review with the aim of increasing market share.
The accounts show the group received close to €500,000 in Government Covid supports and availed of the Revenue warehousing scheme in relation to PAYE/PRSI and VAT of close to €1.8 million.
Staff costs, including wages and salaries fell by more than half, from €4.5 million to €2.01 million during the year under review as employees numbers declined from 221 to 98 people.
Liquidators were appointed to Arzac Developments Ltd, which operated 10 of the Pamela Scott stores in Ireland, and Richard Alan & Co, which had three stores, last October. The companies employed more than 100 people.
At that time, the companies said they had in recent years been experiencing a challenging environment due to changes in customer shopping habits, and increases in operating costs. The Covid crisis led to further problems for Flairline, leading the group to move to close half of the Pamela Scott stores in operation.