Recession-proof rich to help Harrods prosper, boss calls for tax-free shopping reinstatement
An upbeat Harrods’ boss Michael Ward said in an interview that he’s confident the luxury department store would continue to prosper in an economic downturn because “the rich get richer in a recession”.
But he also said to the Financial Times that the government should reinstate tax-free shopping for tourists seeing its refusal so far as “an existential threat”.
He said that when Chinese tourists plan to return to Europe in the second half of the year, “France is the only European country that’s mentioned”. London is still the capital of luxury to him, “but I think we’re in danger of losing that.”
The messages came after he said Harrods was now “trading ahead of 2019 [levels]” after it was hit hard by the Covid-19 pandemic and a lack of tourists in London during lockdowns.
However Ward, who described the retailer as a “shop window to the world”, said Covid was “a good kick for us to refocus on our local customers. We continue to go from strength to strength here.”
The shift now meant British shoppers were responsible for the majority of spending, in stark contrast with 2017 when Chinese nationals became Harrods’ biggest spenders.
Ward’s remark that “statistically the rich get richer in a recession… whatever your political persuasion,” is supported by a recent report which predicted another strong year for luxury goods sales despite soaring inflation and higher bills.
Analysts at Bain & Co and Altagamma said they expected the €353 billion sector to grow by “at least” 3-8% in 2023.
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