Harvey Nichols has filed its accounts for the year to March 2024 and they show that it was a tough year for the business, underlining the reasons behind its CEO change mid-year.
When we say Harvey Nichols, it’s actually a variety of UK-registered companies that make up the luxury retail business. They include Broad Gain (UK) Limited, which operates the seven retail stores, one in Ireland, four international stores and the global webstore, as well as a standalone London restaurant.
And the figures didn’t look good. Revenue for the 52 weeks fell to £204.87 million from £216.64 million. The gross margin also dipped to 44.1% from 45.4% with gross profit falling to £90.4 million from £98.4 million and the operating loss widening to £27.4 million from £15.4 million. It all meant that the loss after tax for the period jumped to £34 million from £21 million.
The company said that the 5% sales fall came at the same time as trade was impacted by weak consumer confidence as a result of the cost of living crisis and the highest interest rates in 15 years. The loss of tax-free shopping in the UK also continued to dent sales from tourists.
During the year it was undertaking a restructuring to reduce its costs, but this also resulted in one-off restructuring costs.
The company had also been loss-making in the previous year but its loss last time was smaller than in the year before and its revenue managed to rise 13% as it said trade was beginning to return to pre-pandemic levels.
Looking also at the results for other individual companies that make up the overall business, it also filed for Harvey Nichols and Company Ltd, which is of particular interest because it operates the Knightsbridge, London, flagship store.
Its turnover fell to just over £78 million from £79.7 million and despite much smaller capital investment in the latest year, the loss after tax widened to £12.9 million from £4 million. As well as the aforementioned reasons for the parent company’s losses, the company also said that included in the number was an impairment of an intercompany debtor of £7.6 million in relation to a loan to Harvey Nichols (Beauty Bazaar) Limited. A decision was made to impaired the value of the loan as Beauty Bazaar has entered into an agreement with its landlord to surrender the lease on the Liverpool store. We reported last month that the company was planning to close that store.
The results for the business known as Harvey Nichols Group are less interesting as this is a holding company, but Harvey Nichols.com Limited is significant as its principal activity is running the webstore.
Again, turnover fell, this time to £48.8 million from £54.7 million and the company made an operating loss of £10.1 million, wider than the £6.3 million of the previous year. The company didn’t give any specific explanation for the 10.7% turnover drop although we assume that the reasons given above were relevant here as well.
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