Mr Eason: The Meath accountant who turned a bookshop chain into a cash cow

With the busy Christmas trading period just around the corner, it’s time for Eason managing director Liam Hanly to get his game face on. For most of the year, Irish books and stationery retailer Eason normally does about €1.2 million-€1.3 million per week in revenue at its network of shops around the Republic. Come Christmas time, it expects to achieve that level of turnover each day for the 10 days leading up to December 25th.
“It’s a huge concentration of effort,” he says, as we do a walkaround its large flagship store on O’Connell Street in Dublin. “Most shops would be the same.”
Some 40 per cent of Eason’s turnover comes from the October to December period each year, which also includes the Black Friday sales event, he says. Pandemics aside, Christmas time literally makes or breaks Eason’s year and Hanly freely admits to sweating on the results of each day’s trading over the festive period, knowing that it’s virtually impossible to claw back any revenue lost on a given day.
“The Christmas rush will always be there in those 10 days. But it’s how strong September, October, November are, too. That’s the challenge for us.”
The release of former Irish rugby captain Johnny Sexton’s autobiography, Obsessed, has provided a timely sales boost as Christmas approaches. Obsessed entered the chart at number two with sales of 3,001 units in the first four days, only kept off the top spot by Sally Rooney’s Intermezzo, which came out in September.
“We expect the book to hit number one this week based on a very strong week of sales,” Hanly says. “We’re in the middle of the big publishing schedule for Christmas. It would have been led off by Sally Rooney a few weeks ago and now Johnny. I’d expect it to be number one in the marketplace this week and one of the top books for Christmas.”
An accountant by training, Hanley has been with Eason for 14 years, the past seven as MD. It’s been a period of huge change for the business, not helped by the Government’s decision to offer free schoolbooks, and external shocks such as Brexit, Covid (he says €13 million in State supports “bailed it out”) and the cost-of-living crisis. His time at the helm has seen Eason exit Northern Ireland, significantly grow its online business, acquire specialist book retailers Dubray and Gutter to complement the “populist” Eason brand, and sell off most of its properties.
The offering in-store has been sharpened and modernised on Hanly’s watch, while its online revenues have roughly trebled over the past five years.
Latest accounts for Eason Retail Plc show group turnover rose by 9.4 per cent year-on-year to €123 million for the 12 months to the end of January 2024. Its Ebitda (earnings before interest, tax, depreciation and amortisation) rose to €8.4 million from €7.1 million a year earlier. However, its pretax profit more than halved to just under €2 million, following a €3.3 million fall in the book value of its O’Connell Street store.
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The revenue figure included some €15.8 million in income from Dubray (which includes the Gutter book shops). In terms of Eason’s retail business, like-for-like sales rose 3 per cent while new stores contributed €11.2 million in income.
Eason has become a cash cow for its shareholders over the past five years following a decision to separate the company-owned properties from the retail operation, and offloading the shops on sale and leaseback deals. This has resulted in about €50.7 million being returned to shareholders, with just two shops (O’Connell Street and Blanchardstown) remaining in the company’s ownership, although they could be sold if the right valuation can be achieved in the future. A big chunk of money was also used to put the retail division on a stable financial footing.
“Covid got in the way” of the potential sale of O’Connell Street store and “we couldn’t achieve the [right] value”, Hanly says.
“It’s still our biggest turnover store and probably the biggest cash contributor to the group. It’s a very valuable store to us,” he says, adding that it probably adds about €800,000 in terms of Ebitda each year.
A strategic review is under way to look at how it can make the O’Connell Street store, with its three trading floors, “relevant” for the future. Over the past 12 months it has culled its range of magazines, from more than 2,000 titles, by about 40 per cent. “You wouldn’t notice the difference in the revenues,” he says. “It was just creating an awful lot of labour in the store.”
Hanly and the retailer’s board, chaired by former Greencore chief David Dilger, now plan to distribute up to €14 million from its surplus cash to shareholders over the next 12 to 18 months. This has been facilitated by strong trading by its Eason and Dubray brands, tight management of costs (€5 million in labour costs has been stripped out in the past five years) and jettisoning trading on tight margin products such as tobacco, lottery tickets and mobile top ups.
The retailer has informed shareholders of its plan to pay a €4 million dividend from its profits for the current trading year, which runs to the end of January 2025, while also releasing €10 million via a share buyback scheme. This would bring the level of payments to shareholders to €65.7 million since 2020, including funds from the property sales.
At present there is little liquidity in the shares given the tight nature of the share register and the fact the stock is not publicly traded, in spite of the plc moniker on its title. Eason has about 230 family shareholders and the move will be welcomed by many, given the older age profile of the shareholder base and the need for estate planning.
Eason plans to pay the €4 million dividend in December, with a share buyback scheme to be launched next March or April, delivering up to €10 million. This will comprise two tranches – about €6 million next spring and the balance in late 2025 or early 2026.
And there should be more to come on an annual basis.
A new three-year strategic plan for the group has been signed off by the board, with the aim of increasing Eason’s Ebitda to €11 million-plus a year, which would represent growth of about 40 per cent. Hanly believes this could facilitate payments to shareholders of up to €4 million a year, while leaving enough in the kitty for capital expenditures on its store network, new shops and continued investment in online.
The business was independently valued at €76 million by Mazars last year.
Eason essentially has three trading arms: its 38 book stores, its Eason online shop and Dubray, the “purest” books retailer with a “more affluent” and “less price sensitive” customer base. Dubray has 15 shops now with more planned for the future.
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Each week, about a quarter of Eason’s sales are achieved online, rising up to 50 per cent for the Black Friday sales event in November.
While excited by the growth opportunities offered by online, Hanly is also confident about the future of bricks and mortar retail. “Ireland is lucky in that we don’t have a proliferation of shopping centres like they do in the UK and, realistically, we won’t have any more new shopping centres of the scale of Dundrum or Blanchardstown built.
“The population has topped five million and is forecast to grow to seven million. So there can only be more concentrated footfall in those centres. And people are social animals, they need to get out and meet other people.”
Hanly’s immediate focus now is the new strategy plan. “That will bring sales beyond €140 million and Ebitda to about €11.5 million,” he says. “It will be achieved through Eason store and category growth, Dubray growth and expansion, online growth as well as favourable market dynamics including shopping centre growth, which is a lower cost mode, book market volume growth and positive demographic trends.”
He is sanguine about Amazon’s plan to open an Irish online store, which should be a potential threat to Eason. “Brexit did Irish retail a favour in many respects. There was access to a huge product rage on Amazon and then when Brexit happened a lot of suppliers on the Amazon marketplace stopped shipping into the Republic and Northern Ireland.
“You’ll also find that Amazon is not that cheap any more in terms of offers and deals. We’re pretty competitive on price, particularly on Irish titles. And does it make any difference to people if it’s .co.uk or .ie? I think it will bring transparency on price and people will become more aware of the delivery charges on Amazon.”
As someone running a book seller, Hanly naturally reads books, although he leaves the heavy lifting to his team of buyers, consuming about one a month. What does he like to read?
“I’d be more fiction and history, used to be more fantasy-type stuff, now more crime fiction. John Connolly I would like, the Charlie Parker series, and Jo Nesbo, the Norwegian guy. And I’d read the odd sports book. One of the best I’ve read would probably be the [tennis player] Andre Agassi book. It’s an eclectic mix.”
Hanly describes himself as a “conservative accountant”, which probably makes him a good custodian for an Irish seller of books, when the competition includes a global giant such as Amazon. Eason’s growth in recent years also suggests a strategic thinker and a man with a keen eye for detail and execution.
“It’s quite an enjoyable job. It’s up to me to provide direction to the team but it’s up to them to deliver,” is how he describes it.
Overall, he sees a bright future for the business. “It’s an organisation that will always be challenged. But we’re trading well. We’re confident about Christmas, there are some good titles coming out, and the core business is performing well. We’re looking forward to the next three years to see if we can stretch ourselves again and get it up to €11m Ebitda figure.”
A new chapter is about to be opened.
Name: Liam Hanly
Job: Managing director, Eason
Age: 54
Lives: Athboy in Co Meath
Family: Married with two teenage children.
Hobbies: Coaching girls Gaelic football.
Something we might expect: He likes reading books, particularly crime fiction and history. And he prefers to read a physical book rather than on a device.
Something that might surprise: He bought a 1979 Toyota Landcruiser FJ40 that he’s trying to restore. “I just like doing stuff with my hands. It’s a project and I fancied it. If I wasn’t an accountant I might have been a mechanic.”