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Harrods swings to profit, expects sales to hit pre-Covid levels this year

By Huw Hughes


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Image: Harrods

Harrods returned to profit in the year to January 29 as sales surged following the easing of lockdowns restrictions.

The British luxury retailer swung to a profit after tax of 41.7 million pounds from a loss of 57.3 million pounds a year earlier, according to filings at Companies House.

Its operating profit came in at 55.5 million pounds from a loss of 66.4 million pounds.

The return to profitability came as the business reported strong sales growth following the end of lockdown restrictions both in its home market of the UK and abroad, and the return of deep-pocket tourist shoppers.

Turnover for the year came in at 581.9 million pounds, up 35.5 percent from the 429.5 million pounds it reported a year earlier.

However, that figure was still 33 percent below the turnover of 870.8 million pounds the department store chain made in the year before the outbreak of the pandemic.

Harrods managing director Michael Ward told the Sunday Times the company is on track to return to those turnover levels this year.

Gross transaction value increased 42.6 percent to 1.57 billion pounds.

Covid recovery

Despite the recovery, Harrods said it continued to be impacted by the pandemic during the year. The company’s iconic Kinghtsbridge store was closed for 10 weeks of the year, though that was a vast improvement on the 22 weeks of closure in the prior year.

The company also said it continued to feel the impact of Brexit, mostly due to the removal of the Retail Export Scheme that came into effect on January 1 2021.

But it added: “It is difficult at this stage to quantify precisely the impact of the future trade as result of the loss of this benefit to oversea customers, given international travel has still not returned to pre-Covid levels.”

Harrods also said importing costs have risen as a result of Brexit, with a 0.5 million pound increase in additional duty and admin fees for the most recent year.

It added: “However, this only relates to imports which Harrods is directly responsible for, being approximately 20 percent of such imports.

“It is therefore reasonable to expect that the costs that Harrods will incur will be higher coming eventually through increased prices from suppliers.”