Harrods managing director Michael Ward has heralded the renaissance of the superbrand and said shoppers have continued to trade up to investment pieces post the recession.
Speaking to Drapers as the luxury department store posted a record pre-tax profit up 40% to £77.8m in the year to January 30, Ward said Harrods had benefitted from increasing the space devoted to and prominence of superbrands including Louis Vuitton, Chanel and Dior.
“The ‘power brands’ have been a huge success. They were the key driver in the performance of womenswear,” said Ward.
“I think there is a particularly strong feeling out of the French houses. They are having a renaissance,” he added.
Ward said sales at the Knightsbridge store, which totalled £519.8m during the year, up from £464m the previous year, were driven by all categories and that the retailer had invested in all areas including the revamp of many of the superbrands’ in-store boutique.
“If we are associated with the superbrands and high quality items customers will be buying from us,” he said. “People are trading up to pieces which will transcend seasons.”
He added: “Where I wouldn’t like to be is the top to mid-end affordable luxury area where people are asking ‘what am I getting here for my fashion and money?’”
Ward said that Harrods would continue to focus on emerging designers with its bridge brands such as Rag & Bone and Theory but denied it was a strategy to bring entry price points down.
Ward said that Harrods also benefitted during the year from increasing the amount of stock on the shopfloor, while many other retailers cut back inventories to avoid deep markdowns as shoppers reined in spending during the recession.
The department store business also upped its menswear space by 11% and will increase the square footage for womenswear in 2011.
“Customers like to visit stores that have got stock,” he said. “If you want to make sales you have to have product on the floor.”
Ward added that Harrods had record sell-throughs during the year and that those levels had continued in the current year, as had the record sales and profit performance.
“We have had a consistent four years,” he said. “There is nothing to suggest that history won’t repeat itself [in the current year].”