Harvey Nichols sales fall, losses grow, but it raises fresh funding
Harvey Nichols saw its sales plummeting in the year to the end of March with a drop to £121 million from a pre-pandemic £222 million. And its post-tax losses grew to £38.6 million from £15.5 million in the previous year. Losses on an EBITDA basis reached as high as £28.1 million, much worse than the mere £1.1 million loss of the previous year.
This came as the company endured a year of enforced store closures due to lockdowns. And even when stores were open, cautious consumers and a social backdrop of wedding, event and party cancellations meant its luxury fashion offer stayed on the shelves.
The company operates eight luxe department stores in Britain and Ireland as well as six international stores.
Those stores are usually magnets for the many tourists in the cities in which it operates, as well as for local luxury fashion fans. But closures that ran to almost eight months out of 12 were devastating and online sales could never plug the gap, its CEO said.
Yet the company's owner Dickson Poon remains "supportive" of the business and a loan of £66 million that it secured has helped to guarantee its future. Some £26 million of that came from the owner, while it also has a £5 million overdraft facility (currently unused) and a new £35 million five-year term loan. Plus it took advantage of the government furlough money to the tune of more than £13 million.
It also sells via Farfetch and Ocado and has strong relationships with these tech platforms.
CEO Manju Malhotra said that the company has focused on controlling its costs and cash flow during the period and invested in IT and its webstore to help push up online sales. The company has also added new categories, with the recent addition of kidswear.
And investment in technology is continuing with a new customer rewards programme due to launch at the end of next month, while a transactional app is also due soon.
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