22nd Dec 11
Harrods aims for record results following overseas lift
by Sally Davies
Shining light: Harrods rises above recession with new owners
Shining light: Harrods rises above recession with new owners
Harrods looks to be in line for another year of record sales and profits after foreign visitors continued to splash the cash at the renowned London emporium.
The Knightsbridge-based department store said that its sales to date in the crucial build-up to Christmas were ahead of the same period last year. This indicates that it will surpass the £1bn-plus sales that it reported for the first time under its new owners in the year ending 29 January. Qatar’s royal family’s investment fund, Qatar Holding, bought Harrods for £1.5bn last year.
Harrods’ managing director Michael Ward said that the luxury goods
Tis the season: Harrods rises above recession under new ownership
market remains very strong, citing this month’s positive underlying sales. He declined to comment on figures but said that they are experiencing year-on-year growth, so technically they will achieve better results than last year’s £1bn.
This bodes well for the luxury goods retailer’s bottom line, after announcing record pre-tax profits of £108.3m, before exceptional items, in 2010-11. Harrods’ Chinese visitors have increased again in 2011, making them the biggest spenders after the British. Ward said that there has been a steady drift towards luxury among overseas shoppers.
However, he also cited heavy spending from the oil-rich nations of Africa, like Nigeria, and South-east Asia, including Singapore, Thailand and Indonesia. He said that the world is rapidly shifting eastwards. But he criticised the visa restrictions which the British government places on foreign visitors, such as the Russians and Chinese.
Ward said in terms of products people are buying timeless luxury and classic pieces – and the big brands, such as Louis Vuitton, Dior and Chanel, continue to win. Harrods also enjoyed storming Christmas hamper sales at £500 or above.
Elsewhere in the luxury goods market, Mulberry, the handbags maker, has acquired its new chief executive from Hermes, the French luxury goods house. Bruno Guillon is set to join in March and will replace Godfrey Davis, who will step into the non-executive chairman role.
The details of Mr Guillon’s contract remain under wraps, although it is believed that it will be higher that Mr Davis’s remuneration this year, which was around £613,000. Hermes’ former managing director has been taken on for his knowledge of the international market. He will lead the retailer’s expansion into Asia and the US, where its success has driven the group towards trebling its profits in the first half.
Mulberry’s leather handbags, like its Alexa handbag which costs about £785, are considered relatively affordable in the luxury world. However, the appointment of Mr Guillon could see the retailer move into the upper tiers of the luxury market because Hernes bags cost thousands of pounds. Mr Guillon said that he is delighted delighted to be joining the team and looks forward to further success in the future.
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