Harrods managing director Michael Ward has warned retailers that it is essential to invest in the store environment during the downturn to give shoppers a reason to trade up.
Ward said that the iconic Knightsbridge department store - which is understood to have experienced double-digit sales growth over the past two months - would continue to invest in its store and brands’ shopfits to give customers excitement.
Ward said: “Over the past 18 months retailers have not invested in stores. We have to trade the customer up and trade their expectations up as well and you need to create an environment that is exciting in order to do that.”
He declined to comment on current trading but said that the retailer was “making a shekel”.
Ward added that Harrods is doubling the space given to super-brands, including Chanel and Louis Vuitton, and will refurbish its Prada, Dior and Gucci areas as these well-established luxury names continue to drive trade across all categories.
Meanwhile, fellow luxury department store Liberty this week reported positive EBITDA for the first time in a decade.
EBITDA rose to £100,000 in the year to December 31 against a loss of £3.9m the year before. Pre-tax losses after depreciation and interest narrowed from £7m in 2008 to £4.5m.
Full-year sales at the department store, which is 68% owned by property and hotels group MWB, soared 20% to £59.6m. Sales at the flagship store on Great Marlborough Street grew 18% to £37.3m and jumped 20% on a like-for-like basis.
The former managing director of Merrill Lynch Global Private Equity, Marco Capello, is currently the front-runner to buy Liberty. The department store was effectively put up for sale last summer after advisers were appointed to lead a review of the business.