Harrods profits spike despite 'tough' conditions

The luxury department store business recorded an 18.7% uplift in pre-tax profits to £168m during the 52 weeks to January 30, 2016 – its seventh consecutive year of profit growth.

In documents filed at Companies House, Harrods said operating profit soared 40% to £178.1m.

Turnover at the world famous retailer advanced 2.6% during the year to £788.9m, while total sales excluding VAT hit £1.44bn.

Harrods said it invested “significant capital expenditure” of £35.7m during the year.

Focus on luxury boutiques

The retailer focused the majority of its spending on luxury boutiques within its Knightsbridge store, but said it also ploughed cash into its smaller airport-based shops.

Harrods said it expects the same level of investment in its current financial year.

Following the depreciation of the pound since the Brexit vote, Harrods admitted it was “exposed to foreign exchange risk in overseas purchasing.”

It said approximately 10% of its purchases are contracted in foreign currencies, although it is hedged up to one year in advance.

Back in August, Harrods boss Michael Ward reversed his decision to quit the business having initially revealed plans to step down during the summer.