Harvey Nichols cuts jobs but performance improves

Harvey Nichols is the latest retailer to announce job cuts in a further sign that the bleak UK retail sector is hurting luxury as much as other price points.

While the job cuts aren’t extensive as they affect less than 5% of its total workforce, they will have a big impact in London where around 60 jobs could go at its HQ.

The luxury retail group is owned by Hong-Kong based Dickson Poon and it has said it will aim to find roles for those affected in other parts of the business.

The latest news comes as other department stores at in the luxury and premium sectors have also cut jobs in the face of weaker sales and rising costs.

Harvey Nichols has been under pressure from inflation even though that has been easing in recent months. But it has also been damaged by the end of tax-free shopping in the UK, something that has negatively impacted other luxury businesses as well.

The company has stores in a number of key destination cities with its flagship in London’s Knightsbridge (not far from another tourist hotspot, Harrods), as well as the Scottish and Irish capitals Edinburgh and Dublin, plus Leeds, Manchester, Birmingham and Bristol. It also has a dedicated beauty store in Liverpool and various international sites.

Vice-Chairman Pearson Poon said: “We are taking action to simplify and strengthen our business by optimising our cost structure to operate more efficiently across our support team.

“Coming out of Covid has been very difficult for the wider retail industry in the UK, which faced increased inflation, cost pressures, and the loss of tax-free shopping.

“We are making difficult decisions today to ensure we are well positioned for success in a continuously evolving retail environment.”

The company has also said that in the year to 1 April 2023, revenues rose and losses shrank. Revenues were up 13% at £216.6 million and its pre-tax loss was £21.3 million, narrower than the £30.4 million recorded for the previous 12 months. Its full accounts for the financial year are due to be published before the end of this month.