Harrods profits up under Al Fayed management

Luxury department store Harrods saw strong growth in profits in the final year under Mohammed Al Fayed's management. Mr Fayed and his top directors – who resigned in May following the sale of the group to Qatar’s sovereign wealth fund

– pointed to a customer loyalty scheme and refurbishments of the group’s Knightsbridge store as a few of the forces behind a 12 per cent rise in sales and 40 per cent surge in profit.

The £78m ($123m) in pre-tax profits reported for the year to January 31 are two-and-a- half times the £30m Harrods earned in 1985, when Mr Fayed outbid rival businessman Tiny Rowland for the group, prompting a political furore.

When Qatar Holding, a direct investment vehicle for the Gulf state, bought Harrods in May for £1.5bn, Ahmad al-Sayed, the fund’s chief executive, said the move was part of a strategy of adding “prestigious, top-performing businesses” to its portfolio at low points in the economic cycle.

Last year’s results show Qatar took on a group in the midst of a significant investment programme: Harrods put £35.6m into refurbishment of its Knightsbridge store, including the addition of two restaurants, and the opening of a shop and boutique in Heathrow’s Terminal 4.

The review also focused on possible overseas expansion, development of an online offering and extending the sale of Harrods-branded souvenirs for the mass market.

Image: Harrods
Source: FT