For the year to January, Harrods reported breaking through the £2 billion sales barrier for the first time. And its pre-tax profit surged from £168 million to £232.2 million, while operating profit reached £253.2 million from £178 million. At least that’s according to The Times, which has seen the figures ahead of the official filing in the next two weeks.
The newspaper said that the company will report that the record numbers came as “a result of the significant boost in trade after the weakening of the British currency”.
And that’s not really a surprise. The retailer is a magnet for tourists, particularly from the high spending markets of China and the middle East. With London seeing more tourists than ever due to exchange rates working in their favour, it would have been a shock if Harrods’ sales hadn’t risen significantly.
CFO John Edgar said of it all: “Every year seems to be a record year for us at the moment and long may it last. This year we have grown our like-for-like operating and net profit even more than last year by 24% and 19% respectively. I think that is stunning and in my experience to have a store and a business that is as old as this one and yet still get the growth that it does, from one location primarily, is phenomenal.”
But it’s not only the exchange rate that has worked in its favour – after all, that only became particularly favourable in the second half of the financial year that these accounts cover. The previous seven financial years in which it sales and profits rose saw the pound valued much more highly against global currencies.
Qatari Holding, which bought Harrods in 2010 has invested over £450 million in the store with initiatives such as an ultra-luxury wellness clinic, more space for ultra-luxury fashion collections and improvements to the building. Over £55 million of its spending happened last year and in the current financial year it’s spending even more. It has plans to create more space for jewellery, to bring menswear and sports product closer together, add to its beauty hall and boost its interiors offer.
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