Soaring Irish fit-out costs making growth hard to justify, warns Currys boss
Currys Ireland already operates 16 stores across the country, selling electronic appliances such as washing machines, laptops and TVs.The company has invested over €2m in recent years, enhancing its stores as it pursues a strategy of sweating more from its assets.Keith Daly, country manager of Currys Ireland, said he recognised that parts of the country were underserved by the retailer, but it has no plans to grow the number of stores in its network in the short term.High fit-out costs were a critical factor for the London-listed group.'With the inflation that is there, it is just hard to see the payback in the short-term,' says Daly“We would have gaps across different areas in Ireland,” Daly said. “We are not in all areas of the Midlands. We are probably under-indexed in certain big cities as well.“The other side of it is the cost of actually opening stores – getting the build works done and all that.”In Ireland, the costs of actually opening a store are quite significant at the moment."With the inflation that is there, it is just hard to see the payback in the short-term.“They are large retail units,” he said. “It is well north of €1.5m to fit out a store to the Currys’ standard. It is quite expensive.”Despite not having short-term plans to grow its store network in Ireland, Currys has experienced strong growth in recent years.Currys Ireland’s most recent accounts show sales increased to €213m in the year to April 27, 2024.The retailer posted a profit of €2.5m, up from a slight loss the previous year.Withdrawal of energy credits in the Budget was felt by consumersDaly said Currys’ Irish arm had performed well this year. However, the withdrawal of energy credits in the Budget was felt by consumers.“They would have been big tailwinds last year,” he said. “That wouldn’t just be ourselves. I speak to retailers in completely different sectors to ourselves who would have said similar things.”Despite the Budget hit, Daly noted sales at Currys had started to pick up in the past week, with Christmas fast approaching.He said Currys had enabled several changes to enhance its Irish stores.These include improved technology, investment in artificial intelligence to help managers run stores and simplify tasks, longer opening hours and pushing different markets.“We are going to double down on what we have,” he said. “We have been here for 30 years.I think we are going to double down on the technology investments“This gives us a big opportunity to invest and grow into areas like gaming, mobiles, appliances. Traditionally we were seen very much as a laptop type of technology brand.“We are going to use the strength of that Currys brand to grow those segments and keep growing our footfall. Using online to drive customers into our stores and talk to our colleagues."I think we are going to double down on the technology investments – we have put a lot of tech in recently.”Currys plc operates online and through 708 stores in six countries.
