Harrods has returned to profit despite continued pressure across the global luxury market and rising staff and distribution costs.
The Knightsbridge department store reported pre-tax profit of £84.9m for the year to 31 January 2026, compared with a loss of more than £34m in the previous year.
Turnover increased by 1.2 per cent to £1.08bn as the retailer continued investing in its flagship store and customer experience.
Operating profit decreased from £177.7m to £172.3m, reflecting higher employee pay and distribution costs.
An average staff pay increase of 3.2 per cent added £8.5m to costs, while increased employer National Insurance contributions cost a further £5.7m.
The previous year’s results included a £62.5m provision for compensation and associated costs relating to survivors of historic sexual abuse by former owner Mohamed Al Fayed. This was not repeated in the latest accounts, although additional costs were incurred.
Harrods said its redress scheme has compensated around 100 women, with further claims still being resolved.
The retailer is continuing to invest in its Knightsbridge flagship, including the redevelopment of its womenswear offer. Its first International Designer Room opened in June as part of the programme.
Chief Information Officer Andreas Efstathiou will become Chief Operating Officer in September, taking responsibility for supply chain, facilities management, engineering and security.
Harrods remains cautiously optimistic despite continued economic and geopolitical uncertainty.
Share