Harvey Nichols owner posts half-year profit despite lower sales

Harvey Nichols Dickson Concepts
Harvey Nichols owner Dickson Concepts saw turnover fall 42.7% to £93.4 million
// Harvey Nichols owner Dickson Concepts saw a rise in first-half profit despite lower sales
// For the 6 months to the end of September, Dickson Concepts saw turnover fall 42.7% to £93.4m

Harvey Nichols owner Dickson Concepts has reported a rise in profit for the first half of its financial year, despite lower sales.

For the six months to the end of September, Dickson Concepts, a Hong Kong luxury goods company which owns Harvey Nichols and also operates retail stores in Asia under the Roger Vivier and Tod’s brands, saw turnover fall 42.7 per cent to HK$981.1 million (£93.4 million).

However, a “substantial increase in profit contribution from the investment portfolio, a doubling of profit in Taiwan, profit contribution from China and tight control in operating costs at all levels of operation” helped the company turn to a profit.

READ MORE: Harvey Nichols inches closer to restructure after calling in advisers

Net profit attributable to equity shareholders reached HK$133.4 million (£12.7 million) from HK$119 million (£11.3 million).

Its investment portfolio contributed a net profit of HK$62.2 million (£5.9 million), which was well above the HK$11.8 million (£1 million) a year earlier.

The company said that during the six months, it dealt with “one of the worst retail environments that Hong Kong has ever faced as a result of the continued outbreak of Covid-19”.

The pandemic has resulted in Hong Kong’s unemployment rate soaring to a level not seen in nearly 16 years, while GDP experienced record declines during the year.

“Tourism has literally come to a complete halt. This has resulted in Hong Kong’s retail sales declining for 20 months in a row on a year-on-year basis,” Dickson said.

That meant group turnover in Hong Kong plummeted 47.4 per cent and its retail operations there “incurred substantial negative cash flows”.

Meanwhile, in China, it “successfully restructured its organisation and expanded both its retail and digital presence, while growing like-for-like sales of its retail stores significantly”.

The company said it’s “extremely pessimistic about the retail climate in Hong Kong”.

In August, Harvey Nichols drafted in restructuring experts from PwC as only four out of its eight stores in the UK and Ireland had reopened since the March lockdown.

The retailer’s Bristol, Birmingham, Liverpool and Dublin locations remain closed as low tourist arrivals and working from home mean city centre shopping districts are empty.

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