Harrods store

Harrods Sees Notable Uptick in Profits and Sales Amidst Post-Pandemic Revival

As Lockdowns End, Shoppers Re-embrace Physical Stores Boosting Harrods’ Performance

In the recent annual trading report, Harrods, the iconic British department store, recorded an impressive 42.9 percent surge in turnover, reaching 831.6 million pounds for the year ending January 28. Data from Companies House reveals this positive trend in performance, attributing it to the store’s continuous operations throughout the year, a stark contrast to the prior year marred by lockdowns, as well as the influx of both local and international shoppers.

Yet, this turnover, though commendable, remains 4.5 percent below the 870.8 million pounds from the year preceding the pandemic’s outbreak. Harrods, akin to numerous other retailers, felt the severe implications of prolonged lockdowns, relying profoundly on its brick-and-mortar establishments. Specifically, the Knightsbridge flagship store faced closures spanning a total of 10 weeks in the fiscal year that ended on January 29, 2022.

Nevertheless, Harrods has displayed a commendable resurgence. The gross transaction value for the latest year showcased a 47 percent leap, touching 2.3 billion pounds.

The department store’s operating profit soared, reaching 158.4 million pounds, a significant rise from the previous year’s 55.5 million pounds. Post-tax profits also flourished, achieving 433.3 million pounds from the earlier 41.7 million pounds.

Adding to its ventures, Harrods unveiled a series of pop-ups featuring luxury brands, including Dior, Prada, Hylo, Manolo Blahnik, and Ninety Percent. Moreover, last month, Harrods made headlines by announcing the inauguration of its inaugural private members’ club in Shanghai, targeting affluent Chinese clientele. Dubbed ‘The Residence’, this exclusive club, located in Shanghai’s Cha House, promises a bar, lounge, private dining spaces, terraces, and a luxurious Gordon Ramsay dining establishment.

Joining a chorus of British retailers, Harrods has also petitioned the government to reintroduce tax-free shopping for foreign visitors, a provision discontinued post the UK’s EU exit in 2020. Harrods’ chief, Michael Ward, opined in December that tourists are gradually gravitating towards fashion meccas like Milan and Paris due to the VAT refund perks.

A recent study by The West End Company (NWEC), representing approximately 600 entities in London’s bustling West End shopping district, emphasized the expanding chasm between tourist footfall and expenditure when juxtaposed against pre-pandemic benchmarks. The report further underscores the deteriorating scenario each quarter, as international shoppers, becoming increasingly cognizant of the UK’s ‘tourist tax,’ shift their expenditures to destinations offering tax-free shopping incentives.