Sales up, profits flat at Harvey Nicks

HARVEY Nichols Regional Stores, the operating business for the luxury department store’s shops in Manchester, Leeds and Edinburgh has reported higher sales but flat profits in a tough consumer market.

Director Gordon Drummond described the results for the year to the end of March as “satisfactory” in a weak enconomy.

Turnover rose 6.7% to £54.9m as ebitda and profit before tax held firm at £3.7m and £2.1m respectively. Gross margins were down a touch at 50.3% compared with 50.5% in 2011.

Looking ahead Mr Drummond, the former general manager of Harvey Nichols’ Edinburgh store said: “The business environment continues to be uncertain but the directors remain confident that the board’s strategy is able to respond to the changing economic conditions and that the company will maintain its current level of performance.

“Trading in the first 14 weeks of the new financial year is in line with the board’s expectations,”

He said the group would continue its programme of store refurbishments – last year it upgraded the Leeds store with a particular focus on the cosmetics department on the ground floor, while the restaurant at Edinburgh was also revamped.
 
The business faces increased competition from online-only retailers he said, and as a response “maintains a high level of market awareness and understanding of both customer trends as well as digital technological developments” to meet consumer needs.

“Furthermore, the maintenance of the highest service standards in all of our retail and hospitality businesses remains a key operational priority,” he added.

In January, the London-based retailer announced it would be opening a 22,000sq ft new concept store in Liverpool. Called Beauty Bazaar, the store in the Liverpool ONE development, is due to open before Christmas.

The accounts for the regional stores business reveal a £1m dividend was paid to the London-based parent company.

The retailer was taken private in 2003 by the Hong Kong based retail investor Dickson Poon, who has recently focused on internationalising the business, opening stores in the Middle East and Far East.