Pre-tax profits at luxury London store Harvey Nichols more-than-halved in the year to April 2 as the company invested in a major refurbishment of its menswear space at its London flagship and closed the department for 10 months.
The company made just £2.6m, compared to £5.4m a year earlier, despite sales for the year rising to £194.5m from £193.1m.
Harvey Nichols CEO Stacy Cartwright, who was previously Burberry CFO, has said she wanted to put the luxury chain “back on the map” and the menswear revamp was a key part of this.
In an interview with the Sunday Telegraph Cartwright said the menswear department had previously been a “rabbit warren” and she added that the company had also overhauled the flagship’s beauty space to increase the company’s “experience” offer.
The new-look menswear department opened in April, just as the firm’s financial year ended, with a 28,000 sq ft space that now hosts over 270 brands, including a large number of labels that are new to the store. It also has a cafe, a barbershop and pop-up space.
Cartwright said the beauty hall, which now has manicure and blowdry bars, and a new cocktail bar, was transformed as “people come for experiences rather than just products and this means people can treat themselves to lipstick or a glass of wine.”
The company has also recently reopened its Hong Kong Landmark department store location after a revamp and remains focused on international expansion with the possibility of more more Middle Eastern stores.
But Cartwright said that its UK stores (five full-size stores, two smaller formats and a Beauty Bazaar store) are also key to the company’s fortunes and have benefited from the post-Brexit vote tourist boom.
She told the newspaper that the business traditionally attracts between 60% and 70% local shoppers but that the weaker pound is boosting the percentage of business it does with international visitors.
And she is upbeat about prospects for next year, even if luxury brands raise their prices. It is likely high-end labels will seek to harmonise international pricing after the pound’s fall sent UK prices lower.
Cartwright said that the UK will remain an attractive shopping destination for tourists as its hotels and restaurants will still be cheaper than those in other European locations as long as the pound stays weak.
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