Sales at the Irish arm of luxury brand Gucci last year soared by 77% from €2.31m to €4.09m.
New accounts filed by Gucci Ireland Ltd show that in spite of the large jump in revenues, the firm's pre-tax profits more than halved to €97,997 in the 12 months to the end of February last.
The drop in profit arose from the firm's cost base increasing by 90% from €2.1m to €3.99m - made up of cost of sales of €2.53m and administrative costs of €1.45m.
The rise in costs included the company's operating lease costs almost tripling from €275,565 to €723,173 last year.
During the year, the directors state that the company "invested in a larger area within the Brown Thomas concession store, to improve the customer experience".
The higher costs resulted in the firm's gross margin last year reducing from 49% to 38%.
The brand is renowned for its range of handbags that come with eye watering prices where Irish customers can pay €33,000 for the purple Gucci Diana crocodile handbag which is only available here in-store.
The brand's Irish website also shows that customers can also pay in-store €25,000 for the 1961 Jackie Crocodile small shoulder bag.
The directors state that the decline in tourism continues to adversely affect the luxury industry, as purchases by tourists were a significant revenue contributor until 2019.
"However, the weakness of tourist demand did not prevent the luxury market from recovering in 2021," they said.
"Domestic consumer spending improved in 2021, while consumer confidence moved close to the level seen in 2019, at least before the Omicron variant emerged and these factors clearly drove the luxury industry's growth in 2021," they added.
On the impact of Covid-19, the directors state that they continue to focus on their key strengths of agility and speed to market "and by looking to capitalise on local market opportunities, it is hoped that we can minimise the impact to the business in the medium term".
Numbers employed at the business remained at 12 as staff costs totalled €350,863.
At the end of February last year, the firm had shareholder funds of €2.66 million.
Its cash funds totalled €2.74m.
Reporting by Gordon Deegan