Har­rods fears tourists won’t re­turn un­til 2022 as sales fall

The Daily Telegraph - Business - - Business - By Han­nah Ut­t­ley

HAR­RODS is braced for a 45pc drop in an­nual sales af­ter the lux­ury depart­ment store’s boss warned that Asian and US tourists could stay away un­til 2022.

Michael Ward, the com­pany’s man­ag­ing di­rec­tor, said that vis­its to its his­toric Knights­bridge shop had plunged by 95pc to less than 4,500 per day. Be­fore lock­down it at­tracted an av­er­age of 80,000 daily shop­pers from all over the world.

Mr Ward said sales had been ham­mered by so­cial dis­tanc­ing mea­sures and re­stric­tions on over­seas travel, with rev­enues this year ex­pected to be 45pc lower than in 2019 and still 35pc down in 2021. It re­ported sales of £868.5m for the year to Feb 2 2019.

Har­rods re­lies heav­ily on tourists from the US and Asia to buy its goods, with Euro­pean and UK cus­tomers ac­count­ing for just 30pc of rev­enue.

Other lux­ury stores in Lon­don’s West End such as Fort­num & Ma­son have been sim­i­larly hit by Covid-19.

In a con­ver­sa­tion with in­vest­ment bank Jef­feries, Mr Ward said he did not ex­pect US and Asian shop­pers to re­turn this year or next and warned there would be no rapid V-shaped re­cov­ery for the UK. He has pen­cilled in a re­turn to growth for Har­rods in 2023.

Chi­nese shop­pers are the big­gest con­sumers of lux­ury goods world­wide and ac­count for around a third of global sales, with Mr Ward ex­pect­ing them to be­come even more im­por­tant af­ter the cri­sis has passed.

Lux­ury brands such as Burberry have re­ported a re­bound in sales among Chi­nese shop­pers in the past few weeks, although it is thought this was largely trig­gered by a shift to­wards do­mes­tic spend­ing as travel re­stric­tions pre­vent cus­tomers from spend­ing their money on trips abroad.

Last month Har­rods opened a popup store at West­field shop­ping cen­tre in Shep­herd’s Bush to han­dle its sum­mer sale, as part of ef­forts to ease the pres­sure on the com­pany’s Knights­bridge store.

Har­rods Out­let is set over two floors and has been de­signed to sup­port higher lev­els of so­cial dis­tanc­ing, which is more dif­fi­cult to achieve at its flag­ship site.

Michael Ward, man­ag­ing di­rec­tor of Har­rods, said vis­its to the lux­ury depart­ment store had plunged 95pc

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