Harrods more than doubled chief executive Michael Ward’s salary last year to £2.3m, even as the company raised nearly £6m in government support under the leave.
Ward, believed to be the highest-paid manager in the history of the upmarket department in Knightsbridge, west London, upped his package by £1m the previous year after Harrods returned to profit as pandemic restrictions eased.
Harrods Limited, the company that operates the London store, made a pre-tax profit of £51m in the year to the end of January 2022 after a loss of £68m a year earlier. Sales soared 35% to £582m as lockdown restrictions eased and international travellers, including from the Middle East, returned.
The department store said it had benefited from furlough payments of £5.8million in the 12 months to January 29, although that was considerably less than the £23.5million of the last year. The reduction in support came as lockdowns on high streets eased and the number of Harrods Limited staff fell by more than 400 to 3,511.
The retailer has also increased in-house royalty payments from £23.2m to £33.5m. The payments cover interest on a loan from the owners of Harrods, the sovereign wealth fund Qatar Investment Authority, which has a property portfolio in London including the Shard skyscraper and parts of the Stratford Olympic Village. No dividend payment was made during the year.
Accounts reveal Harrods have a £620m loan which expires in October next year after being granted an 18-month extension. Ward told The Times, which first published Harrods’ earnings figures, that he was confident the retailer had enough cash to cover higher interest rates.
Ward told The Sunday Times the business was on track to rebound this year with pre-pandemic sales of around £870million.
A Harrods spokesman said he was “extremely grateful to have received government support” as his store closed for 10 weeks between January and April 2021.
He said the salary increase for the highest-paid director reflected a “substantial reduction in salaries in 2020” as well as taking into account that “Harrods exceeded its targets and forecasts, and significantly exceeded the industry luxury in the broad sense”.