Harrods has swung back into the black as the retailer’s top line closes in on pre-pandemic levels.
In accounts due to be filed at Companies House this week, the luxury department store registered a pre-tax profit of £51m in the year to January 2022. That compared to a loss of £68.3m the prior year.
Sales rose 35.5% to £581.9m – and Harrods boss Michael Ward told The Sunday Times that revenues this year are on course to hit the £870.8m it achieved in the year to February 2020.
Harrods was hammered by the coronavirus crisis. Its flagship Knightsbridge store and its standalone beauty stores were forced to close, while international tourism was decimated and is yet to fully recover.
Sales to Chinese shoppers accounted for 15% of Harrods sales in the year to January, compared to 23% in 2019.
Ward said Harrods has attracted more domestic shoppers – thanks to the opening of new restaurants and a hair salon – and demand from Middle Eastern consumers, offsetting the decline in Chinese spend.
Ward hit out at the government’s “frustrating” decision to scrap VAT-free shopping for overseas visitors, and said: “The days of the Chinese tour groups are gone. The primary reason for Chinese tourists to visit the UK is shopping, and now we are 20% more expensive than Paris.”
Ward also urged new prime minister Rishi Sunak to adopt a more pragmatic approach to immigration to help tackle the UK’s labour shortage.
He called on the government to “recognise that and deal with it properly”.
Ward added: “It’s not about giving lorry drivers the opportunity to resign and come and work in the UK for 10 weeks, it’s about having an open policy for jobs and skills that people need.”
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