Harvey Nichols, the luxury department store chain, recently released its financial results for the year ending in April 2022. Despite ongoing losses, the company’s overall performance has shown signs of improvement, reflecting a year of contrasting circumstances.
The financial results were disclosed through various filings for different segments of the business. The primary release was made by Broad Gain (UK) Limited, the parent company overseeing the management of seven UK stores, one store in the Republic of Ireland, the online store, and licensed international stores.
The year was marked by a stark contrast in the business environment, beginning with a complete lockdown and ending with a relative return to normalcy. This positive shift contributed to a surge in revenue, reaching £191.67 million, a significant increase from the previous year’s £121.31 million. Despite the 53-week period compared to the previous 52 weeks, the revenue growth surpassed the impact of the additional week and demonstrated a rebound as the pandemic subsided.
Furthermore, the gross margin rose from 37.3% to 47.1%. However, the company still reported a loss based on earnings before interest, taxes, depreciation, and amortization (EBITDA). The loss decreased to £3.15 million from the previous year’s deficit of £28.53 million. The net loss was larger at £31.79 million, but it had improved from £38.69 million the previous year.
Capital expenditure also saw an increase during this period, rising to £2.8 million from £1.6 million. The allocated funds primarily focused on launching a new international customer loyalty program, a transactional app, and IT improvements to support the growth of the website.
Harvey Nichols faced several challenges throughout the year, including disruptions in the supply chain and staffing shortages due to Brexit. Additionally, the removal of the tax-free shopping perk for international tourists impacted the company’s performance.
On the other hand, Harvey Nichols and Company Limited, responsible for operating the flagship store in London’s Knightsbridge, reported higher turnover and reduced losses. Turnover rose to £57.8 million from £27.3 million in the previous year, while the operating loss decreased to £3.75 million from £17.7 million. The loss after tax also improved, dropping to £4.66 million from £17.4 million.
The increase in turnover can be attributed to footfall gradually returning to city centers, although it has not yet reached pre-pandemic levels. The company also experienced some impact from increased capital expenditure, particularly on IT systems.
Harvey Nichols.com Limited, responsible for the retailer’s webstore operations, reported a negative impact as normalcy resumed. While the e-commerce unit initially benefited from increased online shopping during the pandemic, sales declined once physical stores reopened. Turnover dropped to £53.7 million from £66.6 million, and the operating loss reduced slightly to £5.4 million from £5.7 million. The net loss amounted to £5.7 million compared to £5.99 million previously.
Despite the decline in sales, the company managed to narrow its losses due to its investments in online operations.
Overall, the financial results depict a mixed performance for Harvey Nichols, showcasing both improvements and challenges faced by the luxury retailer. As the pandemic gradually subsides, the company remains optimistic about its prospects for future growth.
Useful links:
1. Harvey Nichols Official Website
2. Financial Times – Business News
