LONDON — Harrods saw its profits increase 16.9 percent for the 2015-16 fiscal year ended Jan. 31, reaching 129.7 million pounds, or $197.1 million at average exchange, for the 12-month period.
According to the retailer’s annual filing with Companies House, the official registry of U.K. businesses, turnover rose 2.6 percent to 788.9 million pounds, or $1.20 billion, despite tough trading conditions, the store said.
It cited the ongoing terrorist attacks impacting international travel across Europe, and the volatile economy’s impact on the retail environment as the biggest risks it had to overcome in the current fiscal year.
Nivindya Sharma, senior analyst at the retail research agency Verdict, identified the downward slide of the British pound following the European Union referendum as one of the factors set to boost the current year’s profit margins.
“Harrods is in prime position to benefit from the rush of international tourists looking to capitalize upon the weak pound, but with prices set to rise in 2017, especially in key categories such as jewelry and leather goods, the retailer will have to work harder to tempt shoppers,” said Sharma.
She also pointed to a number of initiatives the company has been working on, including the introduction of sports leisure brands Lululemon and Bodyism, tapping into the current ath-leisure trend, and the overhaul of its online operations. It has installed 4G services in-store in order to create a better customer experience and make the brand accessible to the wider public.
“Harrods has traditionally been more relevant to an international shopper base than domestic, so such initiatives are imperative to increase its mix of domestic shoppers while keeping the brand relevant to a modern affluent shopper base — something which rivals Selfridges and Liberty do exceedingly well,” added Sharma.