Irish department store Arnotts has said it expects single-digit turnover growth for the year ending January 23, 2011, after suffering dramatic losses in the previous year.
2009 saw significant non-operating losses for the company, mainly due to the revaluation of properties acquired in the Northern Quarter development project, which has now been deferred. There was also significant impact on retail sales as Ireland's economic downturn affected consumer demand.

Turnover declined 25% to €120.7m in 2009, while the group reported a pre-tax loss of €295.1m, after a Northern Quarter asset write down and related costs of €248.6m. This led to Arnotts' banks, Ulster Bank Ireland and Anglo Irish Bank, taking control of the company in 2010.

Arnotts reacted to the deteriorating sales and margin performance by implementing a broad series of cost saving initiatives across the business. Redundancies, pay cuts and reduced trading hours resulted in a €6.4m reduction in payroll costs while €6.9m was saved in distribution, administration and operating expenses.

The banks' commitment to the group was reaffirmed by the provision of a new working capital facility of €10m to support the ongoing operation and future growth opportunities, said Arnotts.

Executive chairman Mark Schwartz said: "Just over a year ago Arnotts was in a perilous state but through a combination of hard work, the commitment of our team, and some tough decisions the business has been stabilised and secured. We have earned the support and confidence of our banks and vendors. An important change in focus has been achieved that will be the basis for a strong future built around the company's retail strengths."

For 2010, the combination of single digit growth in turnover and stricter stock management control is expected to result in a corresponding increase in earnings, says Arnotts. Sales growth has been achieved in most categories of the business, with both the homewares and furniture departments (the largest divisions in the company) trading ahead of the previous year.

Ceo Nigel Blow said: "Arnotts is an iconic Irish business in a location that is second to none. We have an incredibly passionate workforce that understands and cares about Arnotts' value as a retail brand. Our strong performance in 2010 is evidence that we have weathered the adverse consequences of a deteriorating economy and have positioned ourselves to grow and gain market share as the Irish economy improves."