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Harrods profits surge 40%

Harrods, the luxury London-based department store, reported a 40% surge in profits in the final year under its colourful owner Mohamed Al Fayed.

For the year to January 31, Harrods reported £78m in pre-tax profits, up from £56.2m the previous year. Sales were up 12% to £520m. Al Fayed paid himself a dividend of £14.1m.

Al Fayed, who resigned in May following the sale of the famous department store to Qatar’s sovereign wealth fund for £1.5bn, pointed to a customer loyalty scheme and refurbishments of the Knightsbridge store as a key part of its successful year.

Harrods invested £35.6m into refurbishment, including the addition of two restaurants, and the opening of a shop and boutique in Heathrow’s Terminal 4.

This level of investment may increase under the Qataris. The fund’s chief executive Ahmad al-Sayed said in spring it had launched a three-month strategic review of the business, which included consideration of another makeover of the store. It will also focus on possible overseas expansion, development online and extending the sale of Harrods-branded souvenirs for the mass market.

Harrods is also developing its fashion portal, aiming to create a rival to designer etailer Net-a-Porter .

Also under consideration is a Harrods in Shanghai to capitalise on demand for luxury goods from Chinese shoppers.

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