Last week 2024 Selfridges’ results showed how the luxury slowdown and lack of VAT-free shopping for tourists remain a problem for high-end retailers. And on Sunday Harrods did the same, releasing its numbers ahead of its filing at Companies House.

Harrods Group (Holding) Limited saw gross transaction value (GTV) excluding VAT falling 2.4% to £2.198 billion for the year to February 2025, although turnover edged up 0.6% to just under £1.082 billion, which was below the Uk inflation figure. A year earlier, those numbers had risen 6.6% and 8.2%, respectively.

Operating profit (before exceptional items/pension loss on settlement) fell by 17% to £177.7 million and profit before tax was was actually a loss of £34.3 million, having been a profit of £111.5 million a year ago. Profit after tax was also a loss this time of £36.5 million. In the prior year, net profit was a positive figure of £76.7 million, although that was a fall from £135.8 million.

MD Michael Ward explained that the fall in operating profit reflected “reflecting investment in employee salaries and increased distribution costs”, while “continuing to demonstrate the strength of the fundamentals of our business”.

But why did it swing to such a large pre- and post-tax loss this time? Ward said the accounts include “significant exceptional costs… which have impacted profit. These costs include the strategic digital transformation of our enterprise resource planning system and a provision for redress and associated costs for survivors of historic abuse perpetrated by Harrods former Chairman and owner Mohamed Fayed. Compensation awards and interim payments began being issued to eligible survivors at the end of April 2025 and the scheme will remain open until 31 March 2026”. 

The Mohamed Fayed scandal was bound to have a big impact but while it understandably continues to generate negative headlines, the turnover figure shows that shoppers clearly see a difference between the business as it is now and as it was then and it remains one of the world’s most prominent luxury retailers.

Ward focused on the positives saying that “2024 was a year of stable trade for Harrods [regarding] turnover… despite trading conditions in the luxury sector remaining challenging and once again showing outperformance by Harrods of the luxury industry as a whole”. That outperformance came in comparison to the latest Bain & Company and Fondazione Altagamma estimate that overall luxury spending dipped to €1.48 trillion globally in 2024.

Ward said that the “results demonstrate the resilience of Harrods’ business strategy of commitment to exceptional customer offerings and ongoing investment in this period across our Knightsbridge store including the continued redevelopment of our womenswear spaces and renovation of The Georgian restaurant”.

But the market remains challenging, Ward added, although he also said that “we remain confident in the strength of the business, and the resilience of the luxury sector, and that we will continue to drive progress towards longer-term growth and performance objectives”.