Harrods turnover halved during pandemic as retailer swings to loss

Luxury department store Harrods has revealed the financial impact of the COVID-19 pandemic, publishing its accounts for the 12 month period ending 30 January 2021.

Harrods' finances revealed that closed borders and lockdowns had a huge impact on the business, with gross transaction value decreasing by 50.1% to £1.097 billion from £2.201 billion in the previous year.

Turnover dropped to £429.5 million, a 50.7% fall compared to its last accounts which reported £870.8 million.

The business generated a loss after tax for the period of £57.3 million, compared to a profit of £191.4 million in the previous year.

Operating loss for the period was £66.4 million, down from a profit of £203.3 million. The company asserts that "operating loss has been generated due to the Government-imposed lockdown which led to store closures and a large reduction in sales activity".

Harrods reduced staff numbers by 145, taking the company from 4,091 employees to 3,946.

Harrods' directors remuneration for the period totalled £1.6 million, down from £2.4 million the year previous.

The department store has continued to invest throughout 2020/21, with new locations through its H Beauty division, a revamped hair and beauty salon, a temporary outlet store in Westfield London, and a remodelled menswear floor.

In line with government directives, the Knightsbridge store remained closed for the first ten weeks after the financial year ended 30 January 2021. Harrods reported that trade continued mainly through its online channel as well as virtual shopping experiences.

By the end of the first half (six months ending 31 July 2021), the company reported that it has managed to increase its cash position to £97.2 million.

On 16 July 2021, Harrods concluded an agreement with its banking syndicate to extend by 18 months the term loan of £620 million and the revolving credit of £200 million, which was initially due to be repaid in April 2022.

Earlier this month it was reported that the Qatar Investment Authority, which owns luxury department store Harrods, is one of the parties in the running to acquire its rival Selfridges, which was put up for sale by its Canadian owners, the Weston family, earlier this year.