Profits cheer for Harrods

Upmarket department store Harrods cheered a return to profits growth today after recording its best sales performance for more than 150 years.

Harrods – located in the Knightsbridge area of London – said the turnaround was driven by higher demand for luxury goods and the latest designer ranges.

Pre-tax profits nearly tripled to £19.9m (€30.2m) during the 12 months to January 31, against £7m (€10.6m) a year earlier.

A tough start to the year was followed by the strongest second-half trading performance since Harrods was established in 1849.

This enabled the company to restore its annual pay-out to owner and chairman Mohamed al Fayed to £27m (€41m).

A year ago, Harrods was forced to cut his dividend by 35% to £19m (€28.8m) in the wake of a prolonged slump in trade caused by the September 11 terrorist attacks.

Foreign tourists contributed only 25% of annual turnover of £472.5m (€716.7m) in 2003, which was an improvement on the £461.1m (€699.4m) recorded a year ago, Harrods said.

Mr al Fayed said the sales momentum had continued since the end of January with double-digit growth compared with last year.

“This is testament to the unique Harrods brand and the quality of our employees,” he said.

According to results to be filed with Companies House this week, Harrods also managed to lower its net debt to £295m (€447.4m) from £317m (€480.8m).

Changes made to the store during 2003 included a further Room of Luxury offering fashion accessories by designers such as Valentino and Dolce & Gabbana.

The store also shipped in Europe’s largest range of coffee machines and boosted its womenswear ranges to encompass the latest talent on the catwalk.

The changes were initiated by new chief executive Richard Simonin who became the fourth head of Harrods in less than three years when he took up the post last summer. Mr Simonin was formerly at the helm of the Escada luxury goods group.