Luxury department store Harrods has cut its dividend payments to its Qatari owner following a slump in its recent turnover.
The British retailer was bought from Mohammed Al Fayed for £1.5bn in 2010 by Qatar’s sovereign wealth fund. The new owners received a dividend of £103m, a significant drop from £150m paid last year following record profits.
While Harrods’ pre-tax profits rose from £140.4m to £146.3m for the year ending 31 January, turnover fell from £794m to £769m during the same period. Nonetheless, operating profits rose by 2.9% to £126.5m in this time.
Since its takeover the Quataris have made significant investments in the iconic retailer, putting £48.6m last year into luxury brands in the Knightsbridge store and improvements to its airport shops in Heathrow, Gatwick and services at Standsted and Luton. In addition, the luxury designer Fendi also launched a pop-up on the ground floor of Harrods’ flagship store which was designed to resemble an Italian Palazzo.
With 15m visitors each year, the company’s financial downfall is not great enough to significantly affect its future. Harrods said that the same level of investment was expected to continue this year.