LONDON — Harvey Nichols saw its profits halve in the 2015-16 fiscal year due to a major investment in refurbishment, and subsequent store closures while the work was being done. The privately owned company said revenue rose 1 percent, while gross margin was broadly flat at 55 percent.
Profit at the group, which has stores in London and six British cities, the OXO Bar, Brasserie and Restaurant in London, and seven international stores, fell 49 percent to 3 million pounds, or $4.4 million, while revenue rose to 194 million pounds, or $287 million.
All figures have been converted at current exchange for the 12-month period.
“We have made a number of necessary investments this year – in our stores, digital channels and people — in order to continue the radical transformation of the brand that will enable us to adapt to changing customer preferences and achieve future growth at the bottom line,” said Stacey Cartwright, chief executive officer of Harvey Nichols Group.
As reported, the first phase of the London refurbishment was unveiled in April with the opening of two new men’s wear floors, which Harvey Nichols said is showing “encouraging early signs.”
A 10-month overhaul of the ground floor in London resulted in a new beauty destination that offers products, services and experiences that range from manicures and pedicures to LED facials, vitamin infusions and blowouts in the Beauty Lounge, which is open from 8:00 a.m. until 10:00 p.m.
The ground floor at the Knightsbridge, London store also has a new international accessories and jewelry departments, which opened in November in time for the Christmas trading period. The company said the ground floor space in Knightsbridge has been seeing strong growth in sales since reopening.
Hong Kong’s Landmark store also had a complete refurbishment in the summer of 2016, which saw the closure of the store for three months.
The company said that almost half of its revenue has gone through the Harvey Nichols Loyalty App, which launched in the summer of 2015, and offers rewards such as cash vouchers and dining, travel and beauty experiences. It said investment in the web site in 2015-16 made it possible for the group to deliver to more than 200 countries in 74 currencies.
The company said that while the U.K. remains “a very important market strategically and commercially” for the group, Harvey Nichols will continue to assess opportunities overseas, and will be opening a store in Doha, Qatar in 2017, bringing its total international store count to eight. Its other international stores are in Dublin, Riyadh, Hong Kong, Dubai, Istanbul, Ankara and Kuwait.