Selfridges sales rise, losses narrow in latest year

Selfridges Retail has filed its accounts to the end of January with the business — which is responsible for operating its four stores in the UK as well as its webstore – saying that revenue jumped during the period.

Revenue rose to £843.7 million from £653.4 million, an increase of 29%. And operating profit for the 52 weeks was £38.9 million, better than the £38.1 million operating loss of a year earlier. The company said this improved financial performance was driven by strong football and sales in its physical stores, particularly its flagship on London’s Oxford Street and Manchester’s Exchange Square branch. 

That said, the loss before tax for the period was still £37.9 million, although this was much better than the equivalent loss of £121.5 million in the previous year. The net loss was £38.3 million, vastly improved from the £83.9 million deficit 12 months ago.

The company attributed the loss to the application of the accounting standard IFRS 16 ‘Leases’. Its “more significant leases” are only the start of their terms, and as they move towards the end of those terms, certain costs will diminish.

The application of IFRS 16 had a negative impact of £69.5 million this time, compared to £52.1 million a year ago. This has no impact on its cash flows, however.

So what actually happened trading-wise last year? Selfridges said that its trade and turnover continued to feel some effects from the pandemic during the latest period with the Omicron, variant peaking in January 2022 and continuing to affect business in the first few months of the year. 

International Covid restrictions dented the number of foreign visitors coming to the UK throughout 2022 while there was also supply chain disruption linked both to the pandemic and to Brexit.

But Selfridges is clearly on a strong trajectory as far as sales are concerned and that’s what made it so appealing to its new owners. In August 2022, its ultimate parent company at the time, Whittington Investments, sold its European retail businesses in the UK, Ireland and the Netherlands to the Central/Signa joint venture.

Since then, its owners have continued to drive forward the retailer’s vision of “reinventing retail”, and becoming more sustainable and on these fronts, the company is rarely out of the news.

Unfortunately, it looks like we might have to wait until this time next year to see the full early impact of the new ownership on the company’s accounts, unless the firm issues any unexpected updates in the interim.