LONDON — Last year was a difficult one for Harrods, which saw its top line flatline and its bottom line dented by payments to survivors of former owner Mohamed Al-Fayed’s rape and sexual abuse.
Harrods released its accounts to media this week before their publication on Companies House. The store’s managing director Michael Ward described the 12 months to Feb. 1, 2025, as a “stable year for trade,” and added that “significant exceptional costs” related to redress payments to survivors hit the bottom line.
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In the year to Feb. 1, Harrods said gross transactional value, excluding VAT, decreased by 2.4 percent to 2.2 billion pounds, while turnover rose 0.6 percent to 1.1 billion pounds. The company recorded a loss for the year of 36.5 million pounds compared with a profit of 76.7 million pounds a year earlier.
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Ward said that despite difficult trading conditions in luxury, Harrods outperformed the industry as a whole.
Operating profit before exceptional items fell to 177.7 million pounds from 213.9 million pounds due to “ongoing investment in employee salaries and increased distribution costs,” but the number still reflected “the strength of the fundamentals of our business,” Ward said.
Exceptional items were linked to the store’s ongoing digital transformation “and a provision for redress and associated costs for survivors of historic abuse perpetrated by Harrods former chairman and owner Mohamed Fayed.”
In the statement, Ward noted that since the Harrods Redress Scheme was launched on March 31, “more than 100 survivors have entered the process.” The scheme will run until March.
Over the past year Harrods has been dealing with legal action by former female employees who accused the late Al-Fayed of systematic abuse at the store, and in his other properties around the world. At the time, Ward apologized for the behavior of his former boss, who owned Harrods from 1985 until 2010.
Ward said Al-Fayed “operated this business as his own personal fiefdom. It is now clear that he presided over a toxic culture of secrecy, intimidation, fear of repercussion and sexual misconduct. The picture that is now emerging suggests that he did this wherever he operated.”
According to the BBC, which broke the story in its Panorama television program in September 2024, Harrods has set aside more than 60 million pounds to compensate alleged victims of historical abuse through the redress scheme.
Looking ahead, Ward said the current domestic and global economic environment means that 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 toward longer-term growth and performance objectives,” he said.