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