𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Harrods has rebounded to a profit after compensation payments linked to alleged abuse by former owner Mohamed Al Fayed had driven it to loss last year.

Latest accounts show the historic London department store reported an £84.9 million pre-tax profit for the year to January 31.

It bounced back into the black from a £34.3 million loss a year earlier.

Harrods’s previous loss was linked to tough trading conditions and £62.5 million of compensation payments to victims of Al Fayed.

The retailer said it has paid compensation to more than 100 victims from his 25-year ownership of Harrods, with more than 260 people having engaged with its redress scheme.

The latest accounts come after the company was hit by two cyber attacks last year, although the group indicated there was “limited” financial impact.

Harrods reported that turnover increased by 1.2% to £1.1 billion for the year.

Finance chief Geoff Weaver said it represented “further stabilisation and modest growth” for the business, amid headwinds on the global luxury sector.

The group has been buoyed by strong spending from international tourists and wealthy regular shoppers.

Mr Weaver added: “While global macroeconomic and geopolitical uncertainty continues to shape the operating environment, Harrods remains cautiously optimistic.

“Driven by our iconic brand, long-term vision, and unwavering commitment to quality, we are uniquely positioned to navigate market shifts and drive sustainable long-term growth.”

Elsewhere in the sector, rival Harvey Nichols has warned in its latest accounts that it would need to “cease trading” within a year if it fails to secure fresh investment.

It comes as an auction process to buy Harvey Nichols nears its conclusion, with Frasers group and Next understood to be vying to buy the brand.