Home furnishings retailer Gillies of Broughty Ferry said the furlough scheme had prevented a “significantly higher” level of job losses.
The group operates shops in Broughty Ferry, Aberdeen, Perth and Inverness as well as a clearance store in Montrose.
Last year profits fell by 60% and the workforce was reduced as Covid-19 hit.
Managing director Ian Philp said the pandemic had required the company’s directors to make some “difficult decisions”.
He said that in the face of “considerable uncertainty” action had been taken to protect the business.
Furlough scheme prevented more staff cuts
Newly-filed accounts for the year ending August 31 2020 show the financial impact of Covid-19.
Sales fell from £18.3 million in 2019 to £14.3m last year. After-tax profits fell to £440,000 from £1.12m in 2019 – a drop of £680,000.
There was a reduction of 11 staff during the year. Gillies said the impact of lockdowns could have led to much greater numbers of job losses.
“Other than a small number of individuals it was necessary to place the workforce on furlough through the whole period of lockdown,” the company said.
“As restrictions eased and the business reopened staff returned to work on a phased basis.
“Unfortunately, the financial effects of lockdown resulted in a reduction in staffing levels with headcount at the end of the financial year being 11 fewer than at the start of the year.
“Without the Coronavirus Job Retention Scheme it is likely there would have been a significantly higher reduction in staffing levels.”
Five generations of family ownership
The company marked its 125th anniversary last year and currently employs around 180 staff.
Events to mark the milestone had to be cancelled due to the pandemic.
The business, which originated in Dundee, has seen five generations of family ownership.
Its Christmas window displays are one of the highlights of the festive calendar.
Gillies said trading after the first lockdown had been strong and “well above” trading from the same period in 2019.
However it had not made up for turnover lost while closed.
It also highlighted additional costs as a result of Brexit.
The firm said: “The results for the year were heavily impacted by the restrictions brought about by the Covid-19 pandemic.
“Stores were required to close for almost three months. Restrictions on movement of people and goods severely curtailed the warehouse and distribution operations.
“With the pandemic continuing into the current financial year and a further lockdown closing the stores for another three-month period business, operations have again been severely impacted.
“Additional challenges and costs have arisen following the UK’s exit from the EU as well as wider supply and cost issues brought about by the effect of Covid-19 on the international movement of goods.”
Plans for investment
Earlier this year Gillies unveiled plans worth £2.5m to expand its showroom in the heart of Inverness.
It wants to extend its Chapel Street premises by more than a third, building a two-storey extension.
The venture will create 15 jobs during the construction phase. There will also be at least four more full-time jobs in the store.
At the time Mr Philp said Gillies remained committed to investing in the future of the traditional high street.
“We do really like to invest in bricks and mortar. All our stores are town centre, we are not retail park people.”