Luxury department store Harvey Nichols has secured some £66million in funding after losses doubled in its last financial year due to lockdown store closures and fewer tourists.
With eight stores in the UK and Ireland, including its flagship in London’s Knightsbridge, and six overseas, Harvey Nichols saw losses widen to £38.6million in the year to the end of March, from £15.5million the year before.
Since then, its long-term owner – Hong Kong-based tycoon Dickson Poon – has pumped £26million into the business, according to a report in The Telegraph.
Widening losses: Harvey Nichols is struggling due to a lack of rich tourists
The business also secured a new five-year £35million loan and has another £5million to draw from, although that facility is still untouched, the report said.
Meanwhile, it also claimed some £13.6million in furlough in the year to the end of March as its stores were closed for nearly eight months due to repeated lockdowns.
Sales at the department store slumped to £121million, from £222million before the pandemic.
‘The online performance remained strong, but this was not sufficient to offset the impact of the closure of physical stores and the reduced footfall in City centres’, chief executive Manju Malhotra told the Telegraph.
She added that while market conditions remained ‘extremely challenging’, the company had ‘the right strategy in place to achieve our ambition of delivering sustainable profitable growth over the long-term’.
Malhotra, who was promoted to the top job in January after having been with the department store since 1998, has taken steps to improve the e-commerce platform in a bid to return the company to profitability.
Other initiatives include a new loyalty scheme, to be launched in January, and the sale of children designer clothes in store and online as well as improvements to its personal shopping service.
Department stores have suffered during the pandemic, not only because of store closures, but also because rich overseas tourists – who account for a big chunk of their revenues – have been travelling less.
Just before Christmas, Selfridges, another iconic department store, was sold by its billionaire Canadian owner – the Weston family – to Thai conglomerate Central Group in a deal reportedly valued at £4billion.
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