Harrods reports another year of record sales after heavy capex spend

Harrods sales rose 4% in the year to end-January 2016, according to figures the luxury retailer will file with the UK’s Companies House next week. The Times reported that the Qatari-owned company has seen a seventh year of record sales with a rise to £1.44bn, while pre-tax profit has risen to £168m from £141.5m.

The store has benefitted from heavy spend on upgrading its luxury environment 

The company has a big capital expenditure bill having invested heavily in upgrading its Knightsbridge flagship but will still manage to report an operating profit of 40% to £178.1m.

Qatar Holding, which acquired the firm from Mohamed Al Fayed for around £1.5bn six years ago has spent over £400m since it took control, transforming its footwear floor, adding new boutiques and boosting 4G connectivity throughout the flagship location.

CFO John Edgar told The Times that the performance is particularly strong given the circumstances of the financial year concerned.

Although foreign tourists have been pouring into London since the pound’s post-June plunge, in the year to January 2016, the pound was much stronger and prices were therefore higher for the foreign visitors on which Harrods relies.

The flagship store attracts around 15m visitors a year, Edgar said, although the wider business also includes Harrods’ airport travel retail stores, its online business and property operation.

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