Harrods posts a profit despite tough trading conditions

Helen Cahill
Follow Helen
London's Department Stores And Their Christmas Windows
Christmas this year will be key for Harrods' till takings (Source: Getty)

Upmarket department store Harrods posted a robust profit last year, despite the difficulties faced by the retail sector.

Harrods reported in its accounts for the year that profit was up 16.9 per cent to £129.7m, compared to £110.9m the year before.

Group turnover for the period ending 30 January 2016 came to £788.9m, up from £769m the year before, an increase of 2.6 per cent.

The business said in its strategic report that the profits came "despite tough trading conditions" and a programme of capital expenditure which came to £35.7m.

Money has gone on revamping the retailer's luxury boutiques, mainly in its store in Knightsbridge, but also in airports. Harrods said it would be maintaining this level of investment throughout 2016.

The expenditure was less than the year before, however, when the company spent £48.6m.

Read more: West End retailers are expecting a £2.34bn boost from Christmas this year

Harrods and other luxury retailers have won big following the fall in sterling. In the West End, spending from overseas shoppers is expected to boost takings for the year over the £9bn mark for the first time.

The capital's premier shopping district is counting on the continued spending from tourists over Christmas.

However, the fall in sterling will also be causing problems for Harrods, which buys roughly 10 per cent of its goods in foreign currencies.

Harrods said its group pension plan, when it was valued in April 2015, had a deficit of £45m. The company has put in place a recovery plan and aims for the pension scheme to be fully funded by March 2021.

Related articles