Owners want to cash in on the niche Harrods has carved out in Britain, selling must-haves for the oligarch class
It's a long way from Stepney to Shanghai, but 176 years after Charles Henry Harrod opened a grocery shop in London's East End the retailer which has become a global byword for extravagant consumption is considering opening a second vast emporium – in China.
Two months after Mohamed Al Fayed sold the Knightsbridge store to an investment group controlled by the Qatari royal family for £1.5bn, Harrods bosses are working on ways to expand the empire. They want to cash in on the niche Harrods has carved out in Britain, selling must-haves for the oligarch class from £80,000 crocodile Hermès Birkin bags to £3,000 children's pedal cars.
Michael Ward, managing director of Harrods, said: "Can we open stores in other geographies? That opportunity is there. There are other areas of the world where we could operate profitably."
Harrods will chase wealth, and Shanghai is the most likely destination. "China is the most probable, but we would have to do a lot of work first," he said. The focus on China underlines the growing importance of its shoppers to high-end retailers. The number of Chinese visiting Harrods is up 125% this year – and they like to buy. The average spend of a Chinese shopper is more than triple that of an American visitor to the store.
The expansion plans come as Walpole Group, which represents British luxury brands including Harrods, Jimmy Choo and Wentworth golf club, seeks a meeting with the business secretary, Vince Cable, to ask for UK border rules to be relaxed to attract more high-spending Chinese tourists. According to Walpole deputy chairman Guy Salter, Chinese visitors can get a visa for 24 European countries which lasts 90 days and costs €60 (£50), but need a separate one for the UK which only lasts 30 days, costs £67 and involves a 10-page application.
"The number one activity for mainland Chinese tourists is shopping. They travel in groups around Europe and go to Paris to queue outside Louis Vuitton to get their handbags. It is too much bother for them to come to the UK."
Ward said: "We are handing the French government a massive amount of retail business on a plate. The British government is so focused on illegal immigration it can't see the wood for the trees."
Copyright Speakers Corner 2016