Harrods holdings

The History of Harrods

The business runs the popular department store Harrods, which is situated on the Knight's Bridge, London, as one of the most brands in the history of luxury stores. The store is located in a seven-story building covering 111,000 m2. The building has more than 74,000 m2 of revenue and 330 departments. The shop is famous for living up to its founder's values, for everyone, all. To this day, the store at knight bridge is still one of London's most popular tourist attractions, attracting as many as 300,000 in a single day. "Harrods holdings" also run various in-store boutiques in other department stores, such as the Takashimaya department store in Singapore. The company has also opened shops at major airports such as the Frankfurt and Hamburg airports in Germany and the Heathrow airport in Britain. The company has recently opened a shop on queen Elizabeth 11 cruise ship managed by Cunard.

Financial Progress of Harrods

Despite a loss in profitability at the turn of the century, Harrods has gone on to make significant financial progress in the luxury retail goods market following its sale to Qatar holding in the year 2010 (The Guardian 2010). Surveys of the department store market in the UK have shown that the company is ahead of competitors, showing a greater increase in profit density when compared to other department stores such as Harvey Nichols and Selfridges (Bokaie 2008). Financial information released to the public in the year 2015 reveals that the company experienced a decline in turnover from 794 million pounds to 769 million. Gross transaction value, which is the combined amount of money made through sales at the tills rose by 1.2 percent to 1.39 billion. In the year 2015, the company attained a 2.9 percent increase in operating profit to 126.5 million pounds despite harsh economic conditions.

The Impact of Global Economy on the Luxury Industry

One of the most significant trends to have an impact on the luxury industry is the state if the global economy. In the years 2014 and 2015, the Chinese mainland recorded the lowest levels of increase in sales of luxury products since the start of the 21st century. This reduction in growth, stimulated by the Chinese government's efforts to reduce luxury has greatly affected the profits of many international companies based on luxury products and services. A significant portion of the sales made globally in luxury markets such as the UK was actually fuelled, wealthy Chinese tourists. However, a recent move by the Chinese government to devalue the renminbi is expected to reduce their spending power (Aroche 2015).

Opportunities and Challenges for the Luxury Market in the UK

The vote to leave the European Union has effectively made the UK the cheapest destination across the world for luxury products. A reduction in the value of the British pound will encourage more visits to the United Kingdom, giving luxury product providers an opportunity to draw in more customers. Another factor that could grossly affect the profitability of the luxury market in the UK is security, recent terror attacks in France, and the United Kingdom itself could deter tourism, a crucial necessity for the continued growth of the luxury goods industry (BOF 2017).

References

Daniela Aroche (2015).2016 Luxury Industry Predictions from the Experts. Luxury society; http://luxurysociety.com/en/articles/2015/12/2016-luxury-industry-predictions-from-the-experts/

BOF.(2017).Britain Now World's Cheapest Luxury Markethttps.businessoffashion://www.businessoffashion.com/articles/news-analysis/britain-worlds-cheapest-luxury-market

The guardian(2010).Harrods sold for £1.5bn as Mohamed Al Fayed retires. ; the guardianhttps://www.theguardian.com/business/2010/may/08/mohammed-al-fayed-harrods-sold-qatar

Jemima Bokaie.(2008).Harrods, Selfridges and Harvey Nichols lead department store revival. the campaign live;http://www.campaignlive.co.uk/article/harrods-selfridges-harvey-nichols-lead-department-store-revival/787418#4XrVrdlchQSpRCTh.99