Harrods reports “stable trade” as profits fall — what its latest accounts signal for UK luxury department stores

Harrods’ latest filed accounts describe 2024 as a “year of stable trade,” but the numbers show how quickly costs and one-off items can change the headline result for even the most famous luxury store in the UK.

For the 52 weeks to 1 February 2025, Harrods reported turnover up 0.6% to about £1.08 billion. Underlying profitability softened: operating profit before exceptional items fell 17% to £177.7 million, down from £213.9 million the prior year.

After exceptional items, Harrods reported a pre-tax loss of £34.3 million (versus a £111.5 million profit the year before).

Harrods reports “stable trade”: What pulled profit down despite “stable trade”

Harrods’ reporting points to three main pressures:

• Higher ongoing costs, including investment in employee salaries and increased distribution costs, cited as drivers of the operating profit decline.

• Exceptional costs, including a strategic digital transformation (ERP programme) and a provision for redress and associated costs linked to historic abuse allegations involving former owner Mohamed Al Fayed (Harrods established a redress scheme and said more than 100 survivors had entered the process).

• A softer luxury backdrop and tourism-related friction, with accounts commentary and coverage referencing a luxury slowdown and the absence of the VAT-reclaim scheme for foreign shoppers as part of the context.

  
  

What the accounts signal for UK luxury department stores

Even without dramatic sales decline, the Harrods picture highlights several structural realities for UK luxury retail:

1) “Stable sales” doesn’t mean stable profit

A small move in wages, logistics, and operating expenses can materially affect results at scale—Harrods’ turnover was broadly steady, but operating profit still fell.

2) Transformation spend is now a profit-and-loss event

ERP and digital infrastructure upgrades don’t stay in the background anymore; they can become a major line item in the same year a retailer is trying to protect margin.

3) Exceptional items can dominate the narrative

Harrods’ pre-tax result flipped into a loss largely because of exceptional charges (including the redress provision). For luxury department stores, reputational and legal costs can land with real financial weight.

4) Cyber resilience has become part of “luxury fundamentals”

The Financial Times also noted Harrods was impacted by a cyberattack earlier in the year (with minimal operational damage reported) and later experienced a third-party related data breach affecting customer records—reminders that security risk is now business risk.