Harvey Nichols' profits hit as sales fall

By Nigel Cope,City Editor
Friday 30 November 2001 01:00

Harvey Nichols, the upmarket department store group, warned yesterday that it would not meet its profits expectations for the current year due to a sharp fall in sales at its flagship store in London's Knightsbridge. The company said sales in London since the end of September were "significantly lower" than the same period last year, with the key reason being lower tourist numbers in the wake of the US terrorist attacks.

Sales in the Knightsbridge store in October and November are down by 10 per cent on last year, having fallen by 15 per cent in the 18 days immediately after 11 September.

The group's London restaurants have also suffered, with sales down by 14 per cent at the Prism branch in the City and flat at the Oxo Tower.

The only bright spot is the Leeds branch where sales are up 20 per cent, giving a group sales total of minus 8 per cent for the eight weeks since 29 September.

Joseph Wan, the chief executive, said trade from American and Middle Eastern tourists had virtually disappeared. The company said weekly sales remained "erratic" and profits would be below last year's £15.6m. Profits could be as low as £13m, analysts said.

Mr Wan said Harvey Nichols was reducing its reliance on London with a new smaller format store already opened in Birmingham on 18 October and full-size branches scheduled for Edinburgh in September 2002 and Manchester a year later.

The shares fell 4.5p to 151p.

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