The upscale department store Liberty has released its financial results for the year ending in January, showcasing the profound effects of the Covid-19 pandemic on its flagship store in London. With nearly six months of closures throughout the year due to the three separate Covid lockdowns in the UK, the store struggled to attract customers as both domestic and international tourists stayed away, and office workers continued to work from home in London’s West End.
Despite the difficulties faced by its physical store, Liberty’s online business thrived during the lockdowns. The company credits its previous investment in online infrastructure for this success, as it allowed for a smooth transition of its product offerings to digital platforms.
Financially, Liberty experienced a significant drop in total revenue for the year, falling from £93.138 million to £55.768 million. Sales per square foot at the flagship store, including concession revenue, plummeted from £1,309 to £358. The company’s EBITDA before non-recurring and one-off items showed a loss of £12.588 million, compared to a profit of £14.442 million the previous year. However, despite these losses, Liberty managed to reduce its pre-tax loss to £1.322 million from £6.696 million the year before and achieve a net profit of £2.522 million, marking a significant improvement from the £8.342 million loss in the previous year.
The majority of Liberty’s sales growth originated from new customers acquired through its online operations. Existing customers who transitioned to online shopping during the store closures also contributed to a smaller boost in sales. The company observed strong online growth across all product categories, with beauty and home items serving as the primary drivers. As customers spent more time at home, products such as homewares, fabrics, and essential beauty items performed exceptionally well. Liberty’s advent calendar also had a record-breaking year, with the company attributing international customers’ positive shopping experiences to their investments in improving the online shopping experience.
Despite the challenges posed by Brexit, Liberty was well-prepared for the UK’s departure from the EU and did not experience a significant impact. However, some delays in stock movement did occur during the transition.
Overall, Liberty’s financial results depict the divergent impacts of the Covid-19 pandemic on its physical store and online business. While the flagship store faced considerable challenges and financial losses, the online operations flourished and witnessed substantial revenue growth. As Liberty continues to adapt to the new normal, it will be intriguing to see how the company navigates these challenges and capitalizes on its online success moving forward.
Useful Links:
1. Liberty’s Official Website
2. BBC News
