Harvey Nichols is undergoing an “aggressive refurbishment” after profits fell 30% last year amid an increasingly challenging luxury market.
The upmarket department store said pre-tax profits slid to £19.9m in the year to 28 March 2015, as sales remained level year-on-year at £193m.
The retailer said it had begun to update its Knightsbridge flagship store last year and would complete a refurbishment of its ground floor, including its beauty and accessories department, by Christmas 2016.
It will also be expanding deliveries from its website into new overseas markets after launching a Hong Kong site last autumn.
“We anticipate that the trading climate for luxury retail will continue to be uncertain and as such retailers need to work even harder to stand out and deliver a strong, differentiated and compelling customer proposition,” the company said.
Separate accounts for the flagship Knightsbridge store show its sales fell 2.4% to £92.5m while Harveynichols.com increased sales by nearly 27%, to £11.1m.
Luxury retailers had a tough year in 2015 as spending by Chinese tourists was affected by a clampdown on giving business gifts in China while the strength of the pound made shopping in mainland Europe more attractive than London for many visitors.
Last year, Harvey Nichols opened a new larger store in Birmingham and aborted a move into Azerbaijan just four months after opening in the oil-rich state which has been widely criticised for human rights abuses.
The group now has seven stores within the UK and Ireland, including five large stores in London, Edinburgh, Birmingham, Leeds and Manchester, and two small stores in Bristol and Dublin. There’s also a beauty store, Beauty Bazaar, in Liverpool and seven large stores overseas in Turkey, Saudi Arabia, Dubai, Hong Kong and Kuwait.
Last year was the first year under the leadership of Stacey Cartwright, the former finance director of Burberry, who joined in February 2014 taking over from the long-term boss Joseph Wan.
Cartwright said: “I am pleased to report that Harvey Nichols has maintained its top line financial performance for 2014-15 against a backdrop of an increasingly challenging external environment.
“We are well advanced now on our exciting journey to revitalise the Harvey Nichols brand with a significant investment programme in technology, our physical stores, our digital channel and in our people to create a differentiated and compelling customer offer for Harvey Nichols.”
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