Liberty Retail, the renowned luxury department store in London, is steadily recovering from the effects of the ongoing pandemic. In the year ending in January, the company experienced a significant increase in total revenue, reaching £82 million compared to £59.6 million in the previous year. Despite this growth in revenue, profitability has been affected by the surge in online sales. The shift to online channels has resulted in higher variable costs, in contrast to the mainly fixed costs of the flagship store.

Sales per square foot at the flagship store have seen a positive trend, with an impressive increase from £779 to £1,072 compared to the previous year. This is an encouraging sign of the store’s recovery. However, the company’s EBITDA, which represents earnings before interest, taxes, depreciation, and amortization, still shows a loss of £3.5 million before one-off costs. Although this loss is narrower than the £12.3 million loss in the previous year, the company has not yet reached the £14.4 million profit generated prior to the pandemic.

Despite the challenges faced, Liberty Retail achieved an operating profit of £2.4 million in the latest year, a considerable improvement from a small operating profit of £88,000 in the previous year. The loss before tax also decreased to £187,000 from £2.8 million.

At the start of the financial year, the flagship store located in London’s West End remained closed due to lockdown restrictions. It only reopened in mid-April and faced a market with significantly reduced footfall. However, trading gradually improved over the summer, and the company’s management remains confident in the pace of recovery leading up to the crucial Christmas trading quarter.

Despite experiencing a decline in international visitors, the store witnessed periods of performance that were close to pre-Covid levels. However, the emergence of the Omicron variant in December 2021 once again impacted the store’s performance as new measures were implemented, resulting in people returning to remote work.

Throughout the year, Liberty Retail’s online business benefited from customers who were unable to visit physical stores. The challenge, however, lies in retaining these customers as stores reopen. Despite physical stores being open for more weeks compared to 2020, online revenue managed to show slight growth. This is an encouraging sign for the company’s future.

Liberty Retail has recently placed a strong emphasis on beauty. The beauty section of its physical store and special launches, such as the Liberty Beauty Advent Calendar, achieved another record-breaking year. The company also introduced its first subscription service called Beauty Drop, which received a positive initial response from customers. Subscribers receive four boxes of carefully curated beauty products throughout the year in exchange for a monthly spending commitment. This move is expected to lead to higher customer retention levels and cater to high-value customers in the long run.

Overall, Liberty Retail is steadily recovering, evident through its positive revenue and sales figures. While profitability has been impacted by the pandemic, the company is continuously adapting, particularly by expanding its online presence and focusing on the beauty segment. With a positive outlook for the future, Liberty Retail aims to regain its pre-pandemic success and continue flourishing in the luxury retail market.

Useful links:
1. Liberty London Official Website
2. UK Government: Coronavirus advice for businesses