Harvey Nichols, the luxury department store, has reported its financial results for the year ending April 2022, indicating a significant improvement in its overall performance. Although the company still recorded a loss, it experienced a boost in sales throughout the year as pandemic restrictions eased.
The company’s revenues jumped from £121.31 million to £191.67 million, showcasing a successful rebound after facing the challenges brought on by the pandemic. This increase cannot be solely attributed to an extra week in the reporting period, highlighting the strong recovery of the business. Additionally, the gross margin rose from 37.3% to 47.1%, further indicating the company’s positive performance.
However, Harvey Nichols still recorded a loss of £3.15 million on an EBITDA basis, although this is significantly smaller compared to the £28.53 million loss in the previous year. The net loss amounted to £31.79 million, which is a reduction from the £38.69 million loss the year before.
During the year, Harvey Nichols invested £2.8 million in capital expenditure, up from £1.6 million. The company directed its spending towards the launch of a new international customer loyalty program, a transactional app, and IT improvements to support the growth of its online platform. Despite these investments, the company faced challenges due to supply chain disruptions and staffing shortages resulting from Brexit. Additionally, the removal of the tax-free shopping perk for international tourists impacted the company’s performance.
Harvey Nichols and Company Limited, which operates the flagship store in London’s Knightsbridge, reported higher turnover and reduced losses. Turnover increased to £57.8 million, compared to £27.3 million in the previous year. Although the unit remained loss-making, it recorded an operating loss of £3.75 million, a significant improvement from the £17.7 million loss in the previous year. The loss after tax amounted to £4.66 million, showing progress compared to the £17.4 million loss in the prior period. The company attributed the loss to footfall gradually returning to city centers but not reaching pre-pandemic levels. Additionally, increased capital expenditure towards IT systems impacted the bottom line.
Harvey Nichols.com Limited, responsible for the retailer’s webstore, experienced a decline in turnover from £66.6 million to £53.7 million. Despite the decrease in sales, the operating loss narrowed slightly to £5.4 million, compared to £5.7 million in the previous year. The net loss amounted to £5.7 million, a slight improvement from the £5.99 million loss in the prior period. As physical stores reopened, customers shifted away from online shopping, affecting the performance of the webstore. However, the company managed to reduce its losses due to investments made in its online operations.
Overall, Harvey Nichols demonstrated signs of recovery, with increased revenues and improved margins. Despite ongoing challenges, including Brexit-related disruptions and the pandemic’s impact on consumer behavior, the luxury retailer remains focused on enhancing its online presence and customer experience to drive future growth.