Investment programme sees Selfridges full-year profit drop 1.9%
Selfridges has reported a drop in full-year profit following a company-wide investment programme that bit into the balance sheet.
The retailer said that operating profit dropped 1.9% to £152 million in the 12 months to January 31, compared to a year earlier, despite seeing a 5% jump in gross sales to £1.4 billion - a record for the company.
The firm stressed that it was two years into an "ambitious" £300 million revamp of its London and online store, which marked an "unprecedented level of investment" for the retailer.
Selfridges Group managing director Paul Kelly said: "Selfridges has delivered another strong result for 2015/16, we have achieved this by further strengthening the appeal of our stores and online offer through our continuing programme of capital expenditure supporting our drive to remain at the forefront of global luxury retailing."
Selfridges said that spending grew among both overseas and domestic customers, though UK shoppers still accounted for about 70% of sales.
It helped deliver the 10th consecutive year of record sales for the company, which sees over two million people visit its online store and high street locations in London, Birmingham and Manchester each week.
The results come amid a torrid past few months for high-street clothing chains.
Next, John Lewis and House of Fraser have all warned over difficult trading in recent months amid a shift in consumer spending, while last month's unexpected heatwave caused chaos for clothing stores.
Retailers have been scrambling to stay nimble as shoppers increasingly turn to online shopping.
Last month, the British Retail Consortium (BRC)/Springboard Footfall and Vacancies Monitor showed that footfall was down by 0.9% on a year ago, with high street and shopping centre footfall down 0.5% and 2.5%, respectively.
The sector is also having to contend with the impact of a weaker pound, which could impact earnings by driving up the cost of imports, and eventually be passed through to consumer prices.
Sterling has fallen nearly 20% since the Brexit vote.