Selfridges’ financial performance continues to decline as losses surpass £400m.
- The luxury department store chain reported a £41.9m loss for the year ending February 2024.
- Revenue for Selfridges has slightly decreased from £843.7m to £834.9m.
- The impact of accounting standard IFRS 16 leases has influenced reported losses.
- Selfridges remains confident in customer engagement despite financial strains.
Selfridges, a renowned luxury department store chain, is experiencing ongoing financial difficulties, with cumulative losses exceeding £400m. Recently, the company reported a £41.9m loss for the fiscal year ending on 3 February 2024, continuing a trend of financial decline from previous years. This loss follows pre-tax deficits of £39.3m, £121.5m, and £217.2m in prior years.
In its latest financial disclosures, Selfridges revealed a slight dip in revenue, moving from £843.7m to £834.9m. The company’s challenges are partly attributed to the application of the accounting standard IFRS 16 leases. This standard has led to increased depreciation and finance costs, which outweigh reductions in rental expenses during the initial phases of the leases. Despite these accounting-driven challenges, the firm anticipates a neutral impact on profit and loss over the lease term.
Selfridges’ parent company, Cambridge Retail Group, has also faced fiscal challenges, recording a significant pre-tax loss of £340.3m, up from £126.2m the previous year. Despite this, the group experienced a revenue surge from £804.7m to £1.5bn, showcasing its broad market reach. The group’s portfolio includes Selfridges, Shel Holdings Europe within the UK, Brown Thomas Arnotts in Ireland, and de Bijenkorf in the Netherlands.
Despite the financial hurdles, Selfridges has maintained a positive outlook. The company reports an increase in store visits, indicating robust customer engagement and satisfaction with their in-store experience. Initiatives like the Oxford Street Beauty Hall renovation and the Sportopia summer event have been well received, contributing to increased footfall. Additionally, Selfridges has launched its largest Christmas shop ever, aiming to deliver exceptional festive experiences under the ‘More the Merrier’ campaign.
However, the company has made strategic adjustments in response to market conditions, including a decision to reduce 70 head office positions in London. This action reflects their adaptive business strategy amid evolving consumer needs. Furthermore, ownership changes have occurred, with Saudi Arabia’s Public Investment Fund becoming a joint owner of the business behind Selfridges.
Selfridges remains hopeful for the future, leveraging customer loyalty and strategic initiatives to overcome financial adversity.
