Despite impressive sales growth, Selfridges faces increasing financial losses.
- Parent company reports pre-tax losses of £340m, a rise from last year’s £126m.
- Sales surged by 95%, reaching £1.6bn, influenced by high finance costs.
- The workforce reduced by 500 jobs, now totaling around 7,300 employees.
- UK department store losses nearly reached £42m amid declining property values.
Selfridges is grappling with financial setbacks even as its sales figures rise significantly. The parent company, Cambridge Retail Group Holding, owned by Central Group and Saudi Arabia’s Public Investment Fund, registered pre-tax losses amounting to £340 million for the year ending February 3, a stark increase from the £126 million loss recorded the previous year. This financial strain comes in the wake of a remarkable 95% increase in sales, achieving a total of £1.6 billion.
One contributing factor to the losses is the substantial rise in the finance bill, notably the interest paid on borrowings. This financial burden has overshadowed the sales growth, presenting a challenging fiscal situation for the company. Despite these setbacks, the group maintains a lean workforce, having reduced its employee numbers by 500, which now stands at approximately 7,300 across its brands, including Selfridges, Brown Thomas and Arnotts in Ireland, and De Bijenkorf in the Netherlands.
In the UK, Selfridges stores also reported widening losses, with figures nearing £42 million, an increase from £39.3 million in the previous period. The company expressed contentment with its performance, citing ‘a million more visits’ to its stores over the past year as evidence of its strong customer engagement.
However, the decline in property values poses additional challenges. Recent valuations resulted in a significant £638.6 million reduction in property assets, including the flagship Oxford Street store in London, marking a 20.6% decrease. This devaluation further complicates the financial landscape for Selfridges as it contends with existing loans.
Selfridges must navigate financial complexities despite robust sales performance.
