Despite a significant increase in sales, Selfridges reported more than a doubling of losses in its latest annual results.
- The Cambridge Retail Group Holding’s losses before tax surged to £340 million from £126 million the previous year.
- Sales increased by 95% to £1.6 billion, influenced partly by an increased finance bill with high borrowing interest.
- The group reduced its workforce by 500, now employing about 7,300 people across its various brands.
- Property devaluation contributed to its financial challenges, with a notable decline in the value of its flagship store.
In an unexpected financial twist, Selfridges, under the ownership of Cambridge Retail Group Holding, experienced a dramatic increase in losses over the year ending 3 February, despite its sales nearly doubling. The company’s pre-tax losses expanded from £126 million to £340 million, highlighting the strain of rising operational costs and financial obligations. Notably, the company’s borrowing expenses and finance charges have surged, significantly impacting its bottom line.
The retailer’s sales reached a substantial £1.6 billion, marking a staggering 95% increase. This robust growth in sales, while impressive, wasn’t sufficient to counterbalance the financial difficulties that contributed to the increased net loss. Over the period, Selfridges implemented strategic cost-cutting measures, including the reduction of 500 jobs, which now places its total workforce at approximately 7,300 employees. This workforce adjustment is reflective of a broader restructuring effort aimed at improving financial performance.
Among the challenges faced by the group was the notable devaluation of property assets, which significantly influenced its financial statements. The flagship Oxford Street store’s value depreciated by £638.6 million, reflecting a 20.6% drop in its assessed worth. This brings to light the pressures of maintaining high-value retail properties amidst a shifting economic environment.
Individual outcomes for Selfridges retail operations in the UK also reflected challenging conditions, with losses widening to nearly £42 million, up from the previous year’s £39.3 million. Despite these financial difficulties, the company maintained an optimistic outlook, buoyed by an increase in customer footfall, reporting a million more visits compared to previous years.
Selfridges faces an uphill battle to balance its growing sales with mounting financial losses and operational challenges.
