Profits at Harrods rose almost 10-fold last year as big-spending tourists returned to London after the pandemic.
The Knightsbridge department store, which is owned by the investment arm of Qatar’s sovereign wealth fund, saw profits hit £171.6m and sales increased 52% to £994m in the year to January 2023, according to accounts filed at Companies House.
Harrods Group (Holding), which also operates a division serving private jets and sells goods to department stores overseas, said its recovery had come as it was able to open for the full year, after closing for 10 weeks because of pandemic lockdowns in the year to January 2022.
The retailer said it had “a strong recovery in trade as the impact of the Covid-19 pandemic subsided and both local and overseas customers returned”.
Tim Parker, the chief financial officer at Harrods, said last year was one of “recovery and growth”.
“At the beginning of 2022, with many international travel restrictions still in place, there was a subdued return of the global tourism trade that is so important to the UK,” he said.
Parker said sales had been driven partly by “ongoing investment in our physical and digital estate”.
The department store has fared well while rivals such as Harvey Nichols, John Lewis, Fenwick and House of Fraser have struggled, Debenhams has disappeared from the high street and Beales has just a handful of stores.
The retailer plans to introduce new womenswear and furniture rooms and expand its private shopping service in 2023.
Its managing director, Michael Ward, was paid £2.3m, the same as a year before, and the company took on almost 400 extra staff, mostly in sales and distribution, as trade bounced back.
The group, which was bought by Qatar Holding in 2010 for an estimated £1.5bn, did not pay out a dividend to its owners for the third year in a row as it repaid more than £220m of loans and financial leases.
A spokesperson for the retailer said: “Harrods continued to outperform the wider market due to our longstanding relationships with both brands and loyal customers, fuelled by a commitment to creating innovative and exceptional offerings.
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“We remain focused on driving future growth via the curation of exclusive products and experiences that can only be found in Harrods.”
The retailer cut about 700 jobs in 2020 when its beauty services and cafes were forced to remained closed amid social distancing measures.
It made a loss of £68m in the year to January 2021, hit by restrictions linked to the Covid-19 outbreak, but returned to profit in 2022 as restrictions eased.
The company said that in December last year it had extended a £500m borrowing facility for five years to 2027 and secured further lending of up to £200m for three years.
