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Harvey Nicks profit up despite hit to shoppers’ spending

High-end shoppers are not immune to the slowdown in trade experienced in recent weeks, with luxury shopping destination Harvey Nichols reporting a fall-off in trade.

Harvey Nichols chief executive Joseph Wan told Drapers that despite a robust full-year performance from the iconic department store business, in which unaudited profit rose 15% to £16.1m for the year to the end of March, like-for-like sales have tumbled since the new year.

Wan said that post the retailer’s January Sale, like-for-like sales, which were 7% higher in the 2010 calendar year, sunk back to just 3% in February and March and have fallen further in the past two weeks.

He attributed the decline to the lack of “feel-good” factor for Harvey Nichols shoppers, who have previously thought to have been immune from austerity measures and the downturn.

Wan said: “Shoppers are not feeling great. When people feel high they will go out entertaining and shopping and they will have 10 or 12 bags when they leave the
store. Now they only leave with one or two purchases.”

He added that the retailer’s regional stores were performing only slightly weaker than the Knightsbridge store in London.

Harvey Nichols has been working to attract new customers that are “happier to spend less on similar things” by introducing collections aimed at younger
shoppers as well as lower-priced diffusion ranges.

Wan added that the business was considering opening smaller-format stores of between 15,000 sq ft and 18,000 sq ft to “find avenues for growth in difficult times … in a saturated UK market”. It will pilot a luxury beauty-only concept called Beauty Bazaar by Harvey Nichols and could open fashion-only standalone stores at a later date once it has established its own-label offer. Locations have not been confirmed.

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