Today in the pressFriday 11 October 2013 11.32
A-WEAR WANTS TO BECOME A WHOLESALER AND CLOSE ITS HOUSE OF FRASER CONCESSIONS - The rescue plan being proposed for the A|Wear chain of more than 30 fashion outlets, which secured interim examinership this week, includes ramping up its wholesale operation by supplying huge orders of low-cost clothing to bigger retailers and websites across Europe. It is also proposing to close its nine concession outlets in House of Fraser stores in Britain, which it only opened earlier this year, as well as reducing the cost of its upward-only leases in Ireland, writes the Irish Times. Most of A|Wear's stock is sourced from Britain. Jack Stein, a Canadian businessman who bought A|Wear from the Jesta group last month, is backing a plan to source more of its stock from lower-cost locations such as India, China and Turkey. The company believes if it does this, it could cut prices by more than 20% and crack the wholesale market. Its wholesale operation, which accounts for just 10% of sales, is run from Naas, Kildare. In the independent accounts report that accompanied its examinership application, prepared by KPMG, it states that A|Wear cannot meet current demand from its wholesale customers because of cash constraints.
EIRCOM DEAL NOTCHES UP €25m PROFIT FOR BLACKSTONE UNIT - The Irish-based fund managers who led last year's takeover of Eircom made handsome profits of €25m in 2012 and paid more than €3m in tax here, reports the Irish Independent. Dublin-based Blackstone/ GSO manages funds running to billions of euro and makes its income by charging fees for overseeing the investments, including for sitting on steering committees like the one that drove last year's multi-billion euro rescue of Eircom. Funds controlled by Blackstone/GSO are the biggest shareholder in Eircom following the examinership and debt restructuring, with an 18.6% stake. The Dublin-based company had a turnover of €36m in 2012, a more than threefold rise from the €10m in 2011, according to accounts filed with the Companies Office for Blackstone/GSO Debt Management Europe Ltd. Operating costs rose only marginally by comparison, to €11.5m from €9m. That meant pre-tax profits of €25m. The business is run by just 27 staff, costing an average of €255,000 each, according to the accounts.
MONOPOLY MAKER ENJOYS HEALTHY PROFIT - The makers of Monopoly last year hit the jackpot here with operating profits at Hasbro’s Irish operation more than doubling to €1.2m. Based in Waterford, Hasbro Ireland is the corporation’s European manufacturing base and produces 17 million units every year, writes the Irish Examiner. Accounts just filed by the US-owned Hasbro Ireland Ltd with the Companies Office show the firm increased its operating profits by 142% from €497,000 to €1.2m. The firm increased its operating profits after revenues increased marginally from €16.79m to €16.82m in the 12 months to the end of December last. The Waterford base employs 300 that rises to 400 at peak production and along with a Hasbro plant in Massachusetts is the only Hasbro owned and operated factory in the corporation. All other manufacturing is outsourced to third parties. According to the directors’ report “the directors consider the performance of the company to be in line with expectations”. Some of the other games that the firm produces at the plant include Trivial Pursuit, Risk and Cluedo.
DUTCH SANDWICH’ GROWS AS GOOGLE SHIFTS €8.8 BILLION TO BERMUDA - Google funnelled €8.8 billion of royalty payments to Bermuda last year, a quarter more than in 2011, underlining the rapid expansion of a strategy that has saved the US internet group billions of dollars in tax. By routing royalty payments to Bermuda, Google reduces its overseas tax rate to about 5%, less than half the rate in already low-tax Ireland, where it books most of its international sales, says the Financial Times. The figures were revealed in the latest filings by one of Google’s Dutch subsidiaries, and means that royalty payments made to Bermuda - where the company holds its non-US intellectual property - have doubled over the past three years. This increase reflects the rapid growth of Google’s global business. The company has been at the centre of the international controversy over corporate tax avoidance because it earns “substantially all” its foreign income in Ireland and pays relatively little tax in the countries where its customers are based. It has also faced criticism for its use of a “double Irish” structure that exploits differences between the US and Irish tax codes to move the profits from Ireland to Bermuda. It also routes the profits through the Netherlands to avoid withholding taxes, using a structure known as a “Dutch sandwich”. Google declined to comment.