Harrods returned to a pre-tax profit of £84.9 million in the year to the end of January, according to its latest accounts, a year after compensation payouts to victims of its former owner Mohamed Al Fayed pushed the department store into a loss.
The Knightsbridge store recorded a pre-tax loss of just over £34 million in the previous year, driven by difficult market conditions and £62.5 million in compensation paid to victims of Al Fayed’s abuse.
Turnover rose 1.2 per cent to £1.1 billion in the latest financial year. Operating profit before exceptional items was £172.3 million, down from £177.7 million the year before, which Harrods said reflected ongoing investment in employee salaries and increased distribution costs.
Harrods said an average 3.2 per cent pay rise for employees had cost it £8.5 million, while increased employer national insurance contributions added a further £5.7 million.
Geoff Weaver, Harrods’ chief financial officer, said the results showed “further stabilisation and modest growth”.
“Despite ongoing headwinds across the global luxury sector, Harrods once again outperformed the broader market,” he said. “While global macroeconomic and geopolitical uncertainty continues to shape the operating environment, Harrods remains cautiously optimistic. Driven by our iconic brand, long-term vision, and unwavering commitment to quality, we are uniquely positioned to navigate market shifts and drive sustainable long-term growth.”
The figures come against a global slowdown in high-end retail spending, which Harrods has weathered through strong international tourism and the loyalty of high-net-worth customers.
Hundreds of women have come forward in recent years alleging that Al Fayed, who owned Harrods for 25 years, raped or sexually assaulted them. Al Fayed died in 2023, and a BBC documentary the following year, along with subsequent investigations, prompted further victims to speak publicly.
Harrods has established a redress scheme for former employees who say they were abused while working at the store. Other claimants, including nannies, private assistants and air stewards employed by Al Fayed personally, are seeking damages directly from his estate through separate legal firms.
Harrods is also seeking to have members of Al Fayed’s family removed as executors of his estate and replaced by professionals, amid concerns about the estate’s finances and administration. A High Court hearing on the store’s “passing-over” application is scheduled for November. The executors are understood to include Al Fayed’s widow, Heini Wathen, and two of their children, Jasmine and Camilla Fayed.
Founded in 1849 as a tea and grocery shop in Knightsbridge, Harrods has grown into one of Britain’s best-known luxury department stores.
Elsewhere in the sector, Harvey Nichols warned this week that it could collapse without a rescue deal, as Mike Ashley’s Frasers Group closes in on the chain. In accounts filed this week, the group said it would “cease trading” if it was unable to find a buyer and no additional funding was provided.
