Reporter | Huang Shan Edit | Lou Shuqin
Affected by the pandemic and international tourism disruptions, Harrods recorded a loss of more than £57 million in the 2020/21 financial year, while the UK luxury retailer also made a profit of £191 million in the 2019/20 financial year.
On November 2, Harrods released its 2020/21 financial year report on the UK government website composite house. As at 31 January 2021, Harrods recorded a full-year retail deal of £1.1 billion, while turnover fell 50.7% to £429.5 million.
The sharp decline in international visitors, mainly Chinese tourists, has dealt a huge blow to Harrods' business. In the fiscal year before the outbreak, Harrods achieved a 11.6% year-on-year profit increase, which the company said in the company's earnings report that this was mainly due to the large number of international tourists from outside Europe visiting the United Kingdom, of which the main consumer army was tourists from the Middle East and Asia, especially the Greater China region.
Although the UK's epidemic prevention policy has been relaxed and retail businesses have resumed operations, international tourism has not yet returned to pre-pandemic levels, and it is foreseeable that this will continue to affect Harrods' business.
In addition, Harrods mentioned in its earnings report that the Uk government's withdrawal of the "VAT Retail Export Scheme" for non-EU international travellers is expected to reduce the attractiveness of HIGH-end consumption and luxury retail in the UK in the eyes of international tourists.
In response to the COVID-19 crisis, Harrods cut back on open source spending to less than £45 million in fiscal 2020 and lay off 145 to less than 4,000 employees. However, the British "Guardian" reported that some Harrods employees were dissatisfied with the increase in personal workload after the layoffs and planned to strike in the week of Christmas 2021.
In response, a Harold spokesperson said, "Harold has experienced hardships in the past 18 months, and the long-term closure has made it impossible for us to operate normally. Nevertheless, we always put employee benefits first throughout the process and keep as many jobs as possible. ”
Harrods once again stressed optimism about the outlook. "[We' have seen a significant pick-up in demand for luxury goods." According to BOF, Harold said in a media statement that "while the recovery will take time, the initial (recovery) signs are very positive." ”
Harold will continue to open more beauty chains in the UK, h beauty. More importantly, Harrods will continue to invest in the Chinese market and strengthen the luxury retailer brand's influence in China.
In fact, since 2017, Harrods has launched a renovation program for its Knightsbridge store in London, a move designed to attract Chinese mainland and Hong Kong visitors, as well as the rich and upstarts from the Middle East. Chinese tourists have become the absolute main consumer force of Harrods in 2017.
The huge investment has slowed the turnover growth of Harrods Department Stores before the epidemic. Interface Fashion previously reported that harrods recorded a year-on-year increase in total retail transactions in the 2019/20 financial year-on-year, with turnover nearly 0.3% year-on-year; during the reporting period, Harrods' capital expenditure was as high as £114 million, nearly doubling year-on-year.
After the 2020 pandemic. Harrods is more frequent in the Chinese market. On November 3, 2021, Harrods opened China's first tea room at the Shanghai Cha Mansion. Customers in Shanghai can make an appointment through the "Harrods Tea Room" WeChat Mini Program.
This is also the first physical project of Harrods in China to open its services to the public. In October 2020, Harrods opened its first permanent private shopping guide service space in Shanghai, harrods mansion. Less than a year later, Harold opened a second Harold Mansion in Beijing this summer.
Harrods Mansion is a high-end private service project launched by Harrods specifically for Chinese customers, serving only Harrods VIP customers. Michael Ward, managing director of Harrods, once told Interface Fashion that after a decade of investment in China, moving the exclusive membership service to China is a reasonable way to maintain customer relationships and communicate with them.