Harrods has reported a jump in profit and turnover in its most recent annual trading update as shoppers continue to flock back to physical stores following the end of lockdowns.
The British department store chain posted a 42.9 percent increase in turnover to 831.6 million pounds in the 12 months to January 28, according to accounts filed at Companies House.
It said the “strong recovery in trade” was a result of its store network being open for the entire year - whereas it was partially closed the prior year due to lockdown restrictions - and the return of both domestic and overseas shoppers.
However, the turnover of 831.6 million pounds was still 4.5 percent below the 870.8 million pounds the retailer made in the year before the outbreak of the pandemic.
Harrods, like many retailers, was hit hard by multiple months-long lockdowns in recent years as it relies heavily on its physical stores.
In its previous full fiscal year, ended January 29, 2022, the company’s Knightsbridge flagship was closed for 10 weeks in total.
However, it’s continued to make progress since then. Gross transaction value for its most recent year rose 47 percent to 2.3 billion pounds.
Profits surge at Harrods
Harrods’ operating profit jumped to 158.4 million pounds from 55.5 million pounds the prior year, while profit after tax widened to 433.3 million pounds from 41.7 million pounds.
The company recently announced a slew of pop-ups with luxury labels including Dior, Prada, Hylo, Manolo Blahnik, and Ninety Percent.
Last month, Harrods also announced it would be opening its first private members’ club in Shanghai as it hones its sights on deep-pocketed Chinese shoppers.
Harrod’s ‘The Residence’ will be located on level two of Cha House in the heart of Shanghai, and will house a bar, lounge, private dining rooms, terraces, and an exclusive Gordon Ramsay restaurant.
Harrods is one of a growing list of British retailers to have urged the government to reinstate tax-free shopping for international visitors - which was scrapped when the UK left the EU at the end of 2020.
In December, Harrods boss Michael Ward told The Telegraph that tourists have been put off the English capital and now opt for rival fashion cities like Milan and Paris where they can still claim VAT back.
A report this week by The West End Company (NWEC), which represents around 600 company’s across the London's West End shopping district, said the gap between tourist footfall and spend widened in the second quarter when compared to pre-pandemic levels.
The data also suggests the situation is getting worse quarter-on-quarter, as awareness spreads on Britain's ‘tourist tax’, and “savvy” overseas shoppers are diverting spend to tax-free shopping destinations.