Selfridges Returns to Profit Amid Calls to Reinstate Tax-Free Shopping

Selfridges has returned to profitability, posting a pre-tax profit of £13 million for the 52 weeks ending January 3, 2026, a significant turnaround from the previous year's £15.9 million loss. The upscale department store chain attributed this recovery to stronger in-store sales and enhanced cost control measures.

Revenue for the period increased by seven percent to £830.8 million. Operating profit saw a substantial jump of 88 percent to £79.7 million, driven by improved margins and increased sales across its retail locations. This performance marks a notable recovery after the previous fiscal year, which saw Selfridges report its fifth consecutive annual pre-tax loss.

André Maeder, chief executive of Selfridges, highlighted the company's resilience in a challenging economic and retail climate. He specifically pointed to policy decisions, such as the abolition of tax-free shopping for international visitors, as exacerbating these difficulties.

"We are therefore hugely encouraged to see this back on the political agenda and urge the government, under new prime minister Andy Burnham, to bring back tax-free shopping, boosting high streets and unlocking growth across the whole of the UK," Maeder stated. He was referring to the VAT Retail Export Scheme, which allowed overseas visitors to claim a VAT refund on goods purchased in the UK and exported in their luggage. This scheme was discontinued for non-EU visitors in 2021 and was not extended to EU visitors.

The Conservative party has indicated a willingness to reintroduce tax-free shopping for international visitors. Kemi Badenoch, leader of the Conservatives and a former Treasury minister when the scheme was abolished, criticized the current tax policy for driving away customers. However, the Labour party has characterized this stance as a significant policy reversal.

Research from the Centre for Economics and Business Research suggests that reinstating full tax-free shopping could attract an additional 2.35 million visitors to the UK, potentially generating £4.1 billion in extra spending. The report also estimated that for every £1 of VAT refunded, an additional £1.54 in other taxes could be generated. Retail and luxury brands, including Burberry and Mulberry, are also applying pressure on Prime Minister Andy Burnham to reinstate the abolished VAT refund scheme.