Fortnum & Mason sales recover but challenges remain

Fortnum & Mason has filed its accounts for the year to last July with the luxury department store saying the financial period saw a recovery in sales.

Turnover at its UK stores (Piccadilly, Royal Exchange and Heathrow Airport) grew 34%, getting back to the levels they were at before Covid, driven both by “resilient” domestic demand and increased international customers.

The company, which is owned by the Canadian Weston family (former owners of Selfridges), is best known for its luxury food and drink, but it also sells a variety of gift-focused products such as fragrances, premium-priced jewellery leather goods and beauty.

And although its historic flagship store on London’s Piccadilly is what many people think of when they hear the name Fortnum & Mason, it also sells online with that channel now making up 36% of all its retail sales. Online sales fell during the year in question, although this isn’t a surprise given that the previous financial year was one in which coronavirus restrictions meant online was booming. And despite the fall, its e-tail operations are still ahead of 2019 levels.

Overall, its results for the 52-week period saw turnover rising 12% to £208.6 million with pre-tax profit growing 23% to £7.5 million (lower than before the pandemic, however) and profit on an EBITDA basis up to £16 million from £14.2 million in the previous year. The company invested heavily in its operations, spending £8.2 million during the period compared to £4.9 million the year before, with the investment including opening a retail store at Hong Kong airport.

It all meant that net income rose slightly to £5.7 million from £4.9 million in the previous financial year.

The company is investing even more in its operations this year than it did last time, but it has warned of challenging operating conditions and wider economic headwinds.