Fortnum&Mason Reports Strong Results Despite Challenging Market Conditions

Fortnum & Mason has reported a robust performance, highlighting resilience in a challenging retail environment. The UK’s oldest department store experienced a sales increase of 5 per cent, reaching £239 million for the year ending in July.

Even amidst economic pressures, pre-tax profit surged by 61 per cent to £15 million. This significant growth follows a tumultuous 2024, marked by one-off costs associated with a new distribution centre. Positive performance was seen across all sales channels, showcasing the store’s adaptability.

The Christmas period proved particularly fruitful, with revenue climbing by 16 per cent in the five weeks leading to December 25. Demand for popular items such as Christmas hampers and figgy pudding significantly contributed to this uptick. Like-for-like store sales also increased by 7 per cent year-on-year, alongside a 23 per cent rise in online sales, attributed to improved stock availability and the new distribution centre.

In its recent accounts, the retailer disclosed dividend payments to its owners amounting to £2.6 million, as outlined in the previous financial year. However, there was no indication of new dividends for the latest period. Fortnum & Mason, established in 1707, has been under the ownership of Wittington Investments since 1951.

The company, which holds a royal warrant from the King, operates its flagship store on Piccadilly, alongside smaller locations within the City, St Pancras railway station, Heathrow’s Terminal 5, and even Hong Kong. Plans for further expansion are in the pipeline, with possible future locations including Edinburgh and additional sites in London.

Despite the positive financial results, the luxury retailer acknowledged external economic and geopolitical challenges that affect UK consumer confidence and operational costs. The management team, led by Chief Executive Tom Athron, launched a five-year strategy in April 2022 aimed at modernising the Piccadilly store and expanding the business beyond seasonal sales.

Investment initiatives for the latest financial year totalled £11.5 million, largely funding an impressive double-helix staircase at the flagship store. Looking ahead, Fortnum & Mason aims to enhance its presence in Europe and attract more customers from the US, successfully dispatching nearly half a million packages to 73 countries in the past year.

Innovative plans are also underway for new product ranges, including a selection of “Wellness” tea infusions and an exclusive area dedicated to biscuits. As the retailer continues to navigate the complex retail landscape, strong results offer a promising outlook.