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Harvey Nichols secures £66m funding as Covid “significantly” impacts sales

// Losses after tax at Harvey Nichols widened by 149% to £38.6m in the year to 27 March 2021
// The London-based retailer said it expected to meet its banking covenant requirements

Harvey Nichols has secured £66 million in funding after annual losses more than doubled as it grappled with Covid restrictions amid rising cases and a lack of international tourism.

The luxury department store retailer was forced to shut its stores for nearly eight months in the year to March 27 and recorded total sales of £121 million during the period, down from £222 million pre-pandemic.

Losses, meanwhile, widened from £15.5 million to £38.6 million following ongoing Covid restrictions and uncertainty across December.

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The London-based retailer said it expected to meet its banking covenant requirements, although there was “ongoing uncertainty around the impact of Covid on the business”. It added that Mr Poon was a “supportive” owner, and the company was “well-funded”.

Chief executive 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 January, while a transactional app is also due soon.

Malhotra said: “Like most retailers, the group has been significantly impacted by the Covid-19 pandemic with physical stores being closed due to government mandated lockdowns for much of the period, coupled with a sharp reduction in tourist arrivals due to travel restrictions. Over the reporting period, our stores were shut for almost eight out of twelve months. And whilst online performance remained strong, this was not sufficient to offset the impact of the closure of physical stores and the reduced footfall in city centres.

“During these unprecedented times, we have not stood still and focused on managing costs and cash flow during store closures, investing in our IT systems and website to drive our online channel, broadened our category appeal and continued to look at creative ways to maintain the excellent service our customers expect. This would not have been possible without the support of all our colleagues who have done a fantastic job, and I would like to personally thank them for it.”

“There remains a high degree of uncertainty around how the pandemic will play out, but during the period we have continued to implement exciting new initiatives across the business to drive loyalty and excellent customer shopping experience.”

“While market conditions remain extremely challenging, we believe we have the right strategy in place to achieve our ambition of delivering sustainable profitable growth over the long-term. We are a truly versatile and nimble organisation, which means that we can move quickly and adapt to ever changing behavioural trends whilst continuing to provide the experience and service which we have become renowned for.”

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