Harrods Returns to Profit After Compensation Payouts
The historic London department store reported an £84.9 million pre-tax profit in the year to January 2026, recovering from a loss incurred due to payments to victims of former owner Mohamed Al-Fayed.
Harrods has reported a pre-tax profit of £84.9 million for the fiscal year ending January 2026, marking a significant turnaround after a £34.3 million loss in the previous year. The prior year's loss was primarily attributed to the £62.5 million paid in compensation to over 100 victims of sexual abuse by the store's former owner, Mohamed Al-Fayed.
Al-Fayed, who owned Harrods for 25 years until his death in 2023, faced numerous allegations of rape and sexual abuse from former employees. Investigations revealed that many women felt exploited during their time at the store. Lawyer Gloria Allred stated that Harrods was a "toxic, unsafe and abusive environment" under Al-Fayed's ownership, with allegations including serial rape, attempted rape, and sexual abuse of minors, alongside claims of cover-ups and threats.
The Metropolitan Police have received 154 allegations against Al-Fayed, and more than 260 individuals have engaged with Harrods' internal redress scheme. The retailer confirmed compensation payments to over 100 victims.
Despite the impact of the compensation payouts and challenging trading conditions in the year to January 2025, Harrods saw its turnover increase by 1.2% to £1.1 billion in the most recent fiscal year. The company's finance chief, Geoff Weaver, described this as "further stabilisation and modest growth" amid global luxury sector headwinds. The business has benefited from strong spending by international tourists and its regular clientele.
Harrods acknowledged the ongoing global macroeconomic and geopolitical uncertainties but expressed cautious optimism. Weaver stated that the company is "uniquely positioned to navigate market shifts and drive sustainable long-term growth" due to its brand, long-term vision, and commitment to quality.
The company also reported that two cyber attacks last year inflicted "limited" financial damage. In contrast, rival department store Harvey Nichols has warned of potential cessation of trading if it does not secure new investment, with Frasers Group and Next reportedly vying to acquire the brand.