Harrods reports annual loss as it sets aside over £60m for Al Fayed abuse compensation
Harrods has reported a decline in profits for the year ending 1 February 2025, as it continues to be affected by the broader slowdown in the luxury market and the allocation of over £60 million for compensation linked to historic abuse by former chairman and owner Mohamed Al Fayed.
Turnover lifted 0.6% to £1 billion, reflecting a 0.6% increase on 2023 despite continued challenges in the wider luxury sector.
Operating profit for the period amounted to £177.7 million, a decrease on 2023’s £213.9 million, reflecting ongoing investment in employee salaries and increased distribution costs.
The company also reported a loss before tax of £36.5 million, attributed in part to its strategic digital transformation of the enterprise resource planning (ERP) system, as well as a provision for redress and associated costs for survivors of historic abuse linked to Al Fayed.
To address these historic issues, the Harrods Redress Scheme was launched on 31 March 2025. Since its inception, more than 100 survivors have entered the process.
Compensation awards and interim payments began being issued to eligible participants at the end of April 2025. The scheme will remain open until 31 March 2026.
Michael Ward, Managing Director at Harrods, said: "2024 was a year of stable trade for Harrods despite trading conditions in the luxury sector remaining challenging.
"Our results demonstrate the resilience of our strategy of commitment to exceptional customer offerings and ongoing investment in this period across our Knightsbridge store including the continued redevelopment of our womenswear spaces and renovation of The Georgian restaurant.
"The current domestic and global economic environment means that current trading conditions in the luxury sector remain challenging. However, we remain confident in the strength of the business, and the resilience of the luxury sector, and that we will continue to drive progress towards longer-term growth and performance objectives."
