// Harrods plunges £68m into the red
// The company is facing a strike by its restaurant workers
Harrods has reported a colossal loss of £68 million as Covid lockdowns halved its revenues last year.
The luxury department store is now facing a strike by dozens of restaurant workers.
Harrods has reduced staff numbers and ditched a dividend to its Qatari owners in a year that has seen its sales drop due to store closures.
The business, whose owners collected £125 million in the year to January 2020, said it was unlikely to pay another dividend for two more years.
Harrods was bought by the investment arm of Qatar’s sovereign wealth fund, Qatar Holding, in 2010 for an estimated £1.5 billion.
The company reduced its number of staff by 145 to just under 4000.
Harrods slashed jobs last year after chief executive Michael Ward said a drop in tourist numbers and the need for social distancing was having “a huge impact on our ability to trade”.
United Voices of the World, which represents waiters and chefs at Harrods, said it was balloting members about a strike in Christmas week after demanding pay be raised to a minimum of £12 an hour, from just over £9 an hour at present.
Harrods said its import costs had increased by £500 million as a result of extra administration and taxes, while the removal of duty-free shopping for travellers in January this year was likely to hit trade from tourists.
The company said it had extended the terms of a £620 million loan and a £200 million credit facility repayable in April next year by 18 months.
“We have a robust programme that will return the business to strength, and whilst we know recovery will take time, the early signs are very positive,” Harrods said.
“We have seen a huge return to demand for luxury and expect strong sales figures as we head into the peak Christmas trading season.”