Recent financial reports reveal that Selfridges’ losses have cumulatively reached over £400m, marking a significant financial challenge for the retailer.
- The company reported a £41.9m loss for the year ending February 3, 2024, following consecutive losses in previous years of £39.3m, £121.5m, and £217.2m.
- Selfridges last saw a pre-tax profit of £34m in 2020, demonstrating a shift in financial performance over recent years.
- Factors contributing to these losses include the impact of the IFRS 16 accounting standard, which increased depreciation and finance costs.
- Selfridges’ parent company, Cambridge Retail Group, reported substantial losses too, though revenue did increase significantly.
Recent financial disclosures have painted a challenging picture for Selfridges, as the luxury department store chain’s cumulative losses now exceed £400m. The company, with stores in key UK cities, has recorded a £41.9m loss for the fiscal year ending February 3, 2024. These results follow previous annual losses of £39.3m, £121.5m, and £217.2m. Notably, the last pre-tax profit reported by Selfridges was £34m in 2020, suggesting a substantial financial downturn in recent years.
The recent fiscal difficulties were attributed to the adoption of the IFRS 16 accounting standard, which has notably impacted the company’s financial statements. The application of IFRS 16 led to increased depreciation and finance costs while reducing rental expenses. However, the retail giant maintains that these accounting adjustments will have no long-term impact on their profit and loss, as these changes are expected to balance out over the life of the leases.
In a broader context, Selfridges’ parent company, Cambridge Retail Group, also disclosed a marked pre-tax loss of £340.3m for the same financial period, up from £126.2m the previous year. Despite this, the Group’s revenue remarkably increased from £804.7m to £1.5bn. Cambridge Retail Group’s portfolio is diverse, including Shel Holdings Europe, Brown Thomas Arnotts, and de Bijenkorf, alongside Selfridges.
Selfridges executives maintain a positive outlook, emphasising an increase in customer visits by one million last year as a positive indicator of brand engagement. They have noted a favourable customer response to recent investments and expansions, including the renovation of the Oxford Street Beauty Hall and the launch of Sportopia, which celebrates sport. There is optimism around the strategy of enhancing customer experience through promotions such as the More the Merrier campaign, particularly in anticipation of the holiday season.
The company’s strategy adapts to current market dynamics, acknowledging the need for efficiency by implementing workforce adjustments, including around 70 redundancies at their London headquarters. Additionally, the recent joint ownership acquisition by Saudi Arabia’s Public Investment Fund provides a new stakeholder dynamic which could influence future strategic decisions.
Selfridges is navigating significant financial difficulties with strategic adjustments aimed at stabilising and enhancing customer engagement amidst these challenges.
