Selfridges sinks further into the red as sales at luxury department store falter

Luxury department store chain Selfridges has lost more than £400m since it last made a pre-tax profit, it has been revealed.

The business, which has UK stores in London, Birmingham and two in Manchester, passed the milestone after falling to a £41.9m loss in the year to 3 February, 2024.

It comes after Selfridges previously made a pre-tax loss of £39.3m as well as losses of £121.5m and £217.2m.

The last time the chain made a pre-tax profit was the £34m it reported in the year to 1 February, 2020.

Newly-filed accounts with Companies House also show that its revenue fell in its latest financial year from £843.7m to £834.9m.

Rules prove taxing for Selfridges

A statement signed off by the board said: “The loss before tax has been caused by the application of the accounting standard IFRS 16 leases.

“The key movements resulting from the adoption of IFRS 16 are an increase in depreciation and finance costs and the reduction in rental expenses.

“As the company’s more significant leases are near the start of their lease term, the increases in depreciation and finance costs significantly outweigh the corresponding reduction in rental expenses recognised in the statement of comprehensive income.

“As the leases move towards the end of their terms these costs will move in the opposite direction, with no overall impact on profit and loss over the life of the leases.

“The application of IFRS 16 has no impact on the cashflows of the company.”

Separately-filed accounts have also revealed that Selfridge’s parent company, Cambridge Retail Group, posted a pre-tax loss of £340.3m for the same financial year.

The latest total comes after it reported a loss of £126.2m in its prior 12 months.

However, the latest accounts also show that its revenue surged from £804.7m to £1.5bn over the same period.

As well as Selfridges, Cambridge Retail Group includes Shel Holdings Europe in the UK as well as Brown Thomas Arnotts in Ireland and de Bijenkorf in the Netherlands.

In a statement, Selfridges said: “We are pleased with our performance last year which saw a million more visits to our stores, reflecting how much customers enjoy spending time with us.

“This year we are trading in line with expectations, footfall is up again, and we have seen a strong response to many of our investments, launches and activations including our newly renovated Oxford Street Beauty Hall and Sportopia, our huge celebration of sport over the summer.

“We have opened our biggest Christmas shop ever and are very excited to deliver more extraordinary experiences for our customers over the festive period with our More the Merrier campaign.”

In May, City AM reported that Selfridges was to make around 70 redundancies at its London head office.

At the time, the company said it was making the move in response to “market conditions and the evolving needs of our customers”.

Earlier this month, it was also revealed that Saudi Arabia’s Public Investment Fund (PIF) had become a joint owner of the business behind Selfridges.