Luxury department store Selfridges faced a loss of nearly £40 million last year, despite a strong rebound in sales. The company’s main retail business recorded a significant increase of almost 30% in sales, reaching £843 million, approaching pre-pandemic levels. Selfridges attributed this improvement to a rise in customer footfall at its Oxford Street and Exchange Square stores. However, the company reported a loss of £38 million for the 12 months leading up to January 2023, primarily due to increased costs such as distribution and interest payments. With interest expense on lease liabilities nearing £100 million, up 20% from the previous year, concerns were raised about Selfridges’ debt burden.
Earlier this year, it was revealed that Selfridges’ new owners from Thailand and Austria had incurred over £1.7 billion of debt through trading and operating companies. This debt burden prompted fears of higher costs for Selfridges, as owners typically charge the operating company higher rents when additional debt is taken on in the property segment of the business. The accounts for Selfridges Retail confirmed that the company would face stepped rent increases starting next year, resulting from changes to its store leases. Furthermore, the company experienced a 6% increase in distribution costs and a 13% increase in administration costs, while employee costs rose by 11%.
Despite its loss-making status, Selfridges managed to narrow its losses from the previous year. The company witnessed a loss of £84 million in the prior year, thus demonstrating progress. Selfridges was sold by the Weston family, who had owned it for nearly two decades, in 2021. Following the sale, the company’s long-time chief, Anne Pitcher, departed. In August, Selfridges assured that its new owners had financed the business conservatively and planned to invest in the beauty and food halls. Furthermore, Selfridges’ managing director, Andrew Keith, joined several other retail leaders in urging the government to eliminate the “tourist tax” introduced by former Chancellor Rishi Sunak, emphasizing the impact it has on international visitor numbers and the broader tourism ecosystem.
