Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures
LONDON — Sales dipped and losses widened at Harvey Nichols in fiscal 2021, but the company said it is well financed and ready to expand.
The group, which operates eight department stores in the U.K. and Ireland; six international units, and the OXO Tower restaurant in London, said Monday that in the year ended March 27, 2021, losses after taxes widened to 38.6 million pounds from 15.5 million pounds in the previous year.
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For earnings before interest, taxes, depreciation and amortization, the group registered a loss of 28.1 million pounds, compared with a loss of 1.1 million pounds a year earlier.
The larger loss reflected ongoing lockdowns, a “sharp” reduction in tourist arrivals, and store closures that lasted nearly eight out of the 12 months in the reporting period, according to the accounts filed this week at Companies House, the official register of U.K. businesses.
Group turnover fell to 121.3 million pounds in fiscal 2021, compared with 222.1 million pounds in the previous period.
The group noted it has a “supportive owner” in the Hong Kong-based businessman Dickson Poon, and is well funded after having secured 66 million pounds in the year. It received 26 million pounds from its owner; 35 million pounds from a new five-year term loan secured in June 2021, and has a 5 million pound overdraft facility, which Harvey Nichols said is not currently being used.
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Manju Malhotra, chief executive officer of Harvey Nichols, said that like most retailers, the group was significantly impacted by lockdowns and a sharp reduction in tourist arrivals due to travel restrictions. She added while online performance remained strong, it was not sufficient to offset the impact of the closure of physical stores and the reduced footfall in city centers.
“During these unprecedented times, we have not stood still and focused on managing costs and cash flow during store closures and investing in our IT systems and website to drive our online channel. We have broadened our category appeal and continued to look at creative ways to maintain the excellent service our customers expect,” she said.
Malhotra noted that there remains a “high degree” of uncertainty around how the pandemic will play out, “but during the period we have continued to implement exciting new initiatives across the business to drive loyalty and excellent customer shopping experience. While market conditions remain extremely challenging, we believe we have the right strategy in place to achieve our ambition of delivering sustainable profitable growth over the long term.”
The company said that since the fiscal 2022 year began, it has continued to invest in the website and IT systems and a new customer rewards program, which it plans to launch at the end of January 2022, offering customers “curated benefits” and cash back. The program is meant to align with the launch of a transactional app in the new year.
The company said it has fortified its relationships with Farfetch and Ocado in the wake of online demand during the pandemic and has “elevated” its personal shopping offer, including the launch of an at-home wardrobe refresh service.
From a sustainability standpoint, the retailer has been working with The Restory, a specialist repair service for luxury products, and Kids O’Clock, which resells children’s pre-loved clothes. The store also welcomed Cocoon to its London store offering a luxury bag subscription service.
Harvey Nichols has expanded into children’s clothes, which it said was the fastest-growing area of the industry. The department, both in-store and online, features brands including Givenchy, Balmain and Chloé.
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