Selfridges sales rise on experiential offer, but investment hurts profits
today Oct 8, 2019
Selfridges continues to shine on the sales front with another record year in 2018, although, like rival Harrods, it saw its profits slipping at the same time. The company saw its sales rising 6% to £1.85 billion last year, but operating profits were down from £175 million a year earlier to £170 million this time. And the reason? Exactly the same reason as Harrods had given a day earlier — investment.
All of London’s luxury department stores are investing heavily in their physical spaces to create the kind of luxury environments and experiential retail that they do so well, but which don't come cheap. For Selfridges, that has already meant its giant new Accessories Hall in the Oxford Street flagship and its revamped designer womenswear space. In the latest year, the big project was the menswear floor makeover with the installation of a headline-grabbing indoor skate bowl being key to the experiences offer. The company has also boosted its dining selection with the debut of The Brasserie of Light .
The company seems to think the many millions being spent on its oldest and best known store are worth taking a temporary hit to profits and MD Ann Pitcher told The Times, which reported the results, that the numbers were “excellent”.
The firm has committed to investing £300 million in its physical spaces over a three-year period and Pitcher added that it plans to continue working hard to “remain at the forefront of experiences as we disrupt and reimagine the world of retail.” The recent announcement of its plan to open a cinema before Christmas at the Oxford Street site underlines just how far that process of reimagining retail is going.
But the company has also been making very practical changes such as recently relaunching its webstore, which is a key part of its business and saw 140 million visits in 2018. And it has launched a Chines language version of the webstore too. Chinese consumers are a key target for Selfridges and The Times said that a quarter of site visits to the new Chinese site are from UK residents.
The Selfridges Group isn’t just the London department store, of course, as it has three other UK shops, a giant webstore and owns Ireland’s Brown Thomas and Arnotts, plus Canada’s Holt Renfrew and De Bijenkorf in the Netherlands.
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