Selfridges Project Earth

Selfridges sales show signs of recovery, but the retailer’s flagship store on Oxford Street is still suffering from lower footfall levels versus pre-Covid

Selfridges has reported an increase in sales of nearly a third in 2021, signalling a recovery for the luxury retailer, which was recently bought by Thai retail conglomerate Central Group and Austria’s Signa Holding.

The company, which was previously owned by the Weston family, posted a full-year sales increase of 28% to £653.4m, up from £508.5m the year before.

In the 52 weeks to 29 January 2022, operating loss also fell significantly from £136.9m to £38.1m.

Selfridges said store closures at the beginning of 2021 due to Covid “adversely impacted the company’s profitability”, but the end of lockdowns and a return of normal shopping patterns, including an increase in international tourists, helped boost its revenues.

By taking a number of steps to strengthen its balance sheet, such as running a share capital reduction and making internal changes to corporate structure prior to the acquisition, it was still able to pay a dividend of £80m (representing 14p per 20p ordinary share).

“Despite the challenges, Selfridges is set up for a long and sustainable future,” it said in its latest financial statement.

The business is in a transition period after being bought for a rumoured £4bn, but its accounts show it is in a better place to weather the current economic crisis than it was last year, when the pandemic took a major toll on its balance sheet.

It is still not clear what strategy Central Group and Signa have planned for the business as the cost of living crisis intensifies, but Selfridges’ new owners told the Financial Times last month there was scope for a store estate expansion when looking beyond this “period of difficult trading”.

Signa’s executive chair Dieter Berninghaus and Central Group Europe chief Stefano Della Valle told the FT they were eyeing regional cities for new store openings – potentially marking the department store’s first new UK stores in nearly 20 years.

Selfridges currently trades from its flagship store on London’s Oxford Street, plus two stores in Manchester and one in Birmingham.

However, the high-end store faces particularly difficult trading prospects against the backdrop of the current economic crisis, which, combined with the knock-on effects of the pandemic, has taken a toll on Oxford Street’s footfall in recent months.