Harrods to increase in-store investment after customers spent £2.1bn last year

Callum Keown
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More than £2.1bn was spent in the luxury department store last year (Source: Getty)

Harrods will increase investment in luxury boutiques at its Knightsbridge store after defying the retail environment with a 9 per cent profit rise.

The luxury department store posted profits after tax of £176.7m, up nearly 9 per cent on the previous year's £162.5m.

More than £2.1bn was spent at Harrods in the year ending 3 February 2018, up 6.8 per cent on the same period in 2017, according to its annual accounts.

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The company said the strong sales were driven by the performance of its fine jewellery department and growth in areas such as menswear and beauty.

But it warned that events “impacting the level of international travel to the UK” posed a major business risk.

It also identified staff retention and recruitment, the retail environment and currency volatility as major risks.

Approximately 11 per cent of the company's purchases are contracted in a foreign currency.

Harrods has ramped up its capital expenditure programme – spending £55m, up from £48.7m the previous year.

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The programme has seen the restoration of the food halls get under way and the launch of new fine watches and jewellery departments and a wellness clinic.

The company said the programme of investment would increase throughout 2018 and continue to 2021.