WEBVTT - Why Harrods Is Doing Better Than Before the Pandemic 0:00:00.280 --> 0:00:01.680 Oh hi, is it so free? 0:00:03.640 --> 0:00:08.039 Nice to meet you, high, Nice to meet you. 0:00:08.520 --> 0:00:09.720 Good, thank you not bad. 0:00:12.320 --> 0:00:16.239 So Moses and I have just hinted the luxury accessory 0:00:16.360 --> 0:00:19.439 part of Harold's and I don't know what to think 0:00:19.520 --> 0:00:23.920 other than all the ermes belts, all different colors hanging up. 0:00:24.000 --> 0:00:27.200 I know they've been and must have accessory. All the 0:00:27.240 --> 0:00:32.680 beautiful handbags, different sizes, different makes, different colors. 0:00:33.880 --> 0:00:38.159 Okay, so the high ticket item for men at the 0:00:38.200 --> 0:00:43.920 moment seems to be watchers. So we're now walking through. 0:00:44.040 --> 0:00:48.680 We're walking past Valenciaga on our right and you're on 0:00:48.760 --> 0:00:49.200 our left. 0:00:50.280 --> 0:00:54.720 Everyone shopping in here looks really happy. 0:00:55.840 --> 0:00:58.240 Another thing I've noticed is you just can't get over 0:00:58.320 --> 0:00:59.560 the volume of stock. 0:01:00.200 --> 0:01:01.840 That everything is available. 0:01:02.000 --> 0:01:07.560 Every handbag make from the luxury houses is here. There's watches, 0:01:08.200 --> 0:01:13.240 there's diamonds, there's bracelets, there's air rings, there's food, there's chocolates. 0:01:13.760 --> 0:01:15.320 It's just vast. 0:01:17.920 --> 0:01:20.679 It feels quite surreal just to know that, you know, 0:01:20.760 --> 0:01:23.000 this is a type of luxury, This is a type 0:01:23.040 --> 0:01:28.800 of extravagance that is not really accessible to the normal person. 0:01:29.000 --> 0:01:32.000 But every now and again you can get a little 0:01:32.000 --> 0:01:32.679 glimpse to it. 0:01:46.200 --> 0:01:49.200 On the ground reporting there from our producers Lean Gerns 0:01:49.280 --> 0:01:52.400 and Moses and who traveled to hero It's this week. 0:01:52.400 --> 0:01:55.680 It's a tough job Dave nowadays to see for themselves 0:01:55.760 --> 0:01:59.280 what Heros does to actually maintain its reputation as a 0:01:59.360 --> 0:02:01.559 primer retailer and Knightsbridge, that's. 0:02:01.480 --> 0:02:04.080 Right, one of the toughest gigs in journalism training around 0:02:04.120 --> 0:02:06.480 the fruit tools in harrod you know, I mean, Francine. 0:02:06.560 --> 0:02:09.680 What I find really fascinating about Harrod's is what it 0:02:09.720 --> 0:02:13.520 tells us about the broader market for luxury around the world, 0:02:13.600 --> 0:02:16.560 Britain's economy. I mean, it's such an iconic landmark in 0:02:16.600 --> 0:02:20.000 West London and it's just one shop after all, but 0:02:20.120 --> 0:02:22.640 it symbolizes so much in terms of the history of 0:02:22.680 --> 0:02:26.040 London as financial capitals where people come from all over 0:02:26.040 --> 0:02:27.880 the world to spend their money, and obviously all of 0:02:27.880 --> 0:02:31.120 that has been massively disrupted in recent years. So the 0:02:31.120 --> 0:02:33.880 future of Harold's in a way tells us a little 0:02:33.919 --> 0:02:35.560 bit perhaps about where London is headed. 0:02:37.280 --> 0:02:39.880 I'm David Merritt and I'm Francine Laqua and this is. 0:02:39.840 --> 0:02:42.720 In the City Bloomberg's podcast, connecting you to the conversations 0:02:42.800 --> 0:02:44.320 at the heart of the City of London. 0:02:44.720 --> 0:02:47.320 This week conversation with The Herod's managing director of Michael Ward. 0:02:47.440 --> 0:02:50.120 We talk about the luxury market, the impact of the 0:02:50.200 --> 0:02:52.680 end of tax free shopping and makeup. 0:02:54.480 --> 0:02:57.359 Michael tell us about the general landscape now for shopping 0:02:57.360 --> 0:02:58.720 in London and particularly luxury shopping. 0:02:58.720 --> 0:02:59.160 I mean, the. 0:02:59.080 --> 0:03:03.200 World's shopping has been disrupted and imaginably by the pandemic. 0:03:03.360 --> 0:03:04.800 Are we back to the where we're before or are 0:03:04.840 --> 0:03:06.720 we somewhere else now in terms of how people come 0:03:06.760 --> 0:03:07.600 and shop in your store. 0:03:08.080 --> 0:03:10.040 I think there's two or three things in this, one 0:03:10.040 --> 0:03:13.280 of which is we are now back beyond twenty nineteen sales, 0:03:13.840 --> 0:03:16.760 and that's without the Chinese customer that used to represent 0:03:16.800 --> 0:03:19.520 about twenty five percent of our sales, and of course 0:03:19.560 --> 0:03:22.560 the loss of tax free shopping. So we've had many, 0:03:22.600 --> 0:03:24.720 many things to sort of fight again. So the first 0:03:24.720 --> 0:03:27.360 thing was to get back our local customers, and in 0:03:27.480 --> 0:03:30.480 doing that we invested in very high quality cuisine. So 0:03:30.560 --> 0:03:34.240 we've put in Tom Kerriage, We've put in Jason Atherton, 0:03:34.360 --> 0:03:37.880 We've put in Gordon Ramsey, We're put in Beyond Frans 0:03:37.920 --> 0:03:40.360 and who's the number six chef in the world. We've 0:03:40.400 --> 0:03:43.560 just signed up Massa who's going to top sushi chefs 0:03:43.560 --> 0:03:47.000 in New York, so making it a real destination for food. 0:03:47.440 --> 0:03:49.760 And then we allied that with health and wellness, and 0:03:49.800 --> 0:03:52.520 that's really given us a strong position with our local shopper, 0:03:52.560 --> 0:03:55.920 which is now representing the vast majority. 0:03:55.440 --> 0:03:56.120 Of our sales. 0:03:56.480 --> 0:03:58.040 Overall, house business. 0:03:58.080 --> 0:04:01.360 Business is really good, but you have to run three 0:04:01.400 --> 0:04:04.000 times as quickly to get there. We have to do 0:04:04.080 --> 0:04:07.120 constant promotional activity to make it interesting for the customer. 0:04:07.720 --> 0:04:08.040 They say. 0:04:08.120 --> 0:04:11.600 Over Christmas we totally covered the store in Gingerbread to 0:04:11.640 --> 0:04:15.080 have Dior and a wonderful World of Dior, a cafe 0:04:15.200 --> 0:04:18.080 and a full exhibition. Then we went on to Kusama 0:04:18.160 --> 0:04:21.839 with Wheaton with a sixteen meter statue that was peering 0:04:21.920 --> 0:04:24.359 in and painting the store, and then we went straight 0:04:24.400 --> 0:04:27.440 into that with Laura Piano with a beautiful cashmere collection. 0:04:27.760 --> 0:04:30.080 So you just have to run all of the time 0:04:30.120 --> 0:04:30.760 to stay still. 0:04:31.279 --> 0:04:34.240 When you say local shopper, does that mean transite living 0:04:34.240 --> 0:04:36.680 nearby or does that mean all of London as opposed 0:04:36.760 --> 0:04:39.479 to as opposed to you know, as you said, the 0:04:39.560 --> 0:04:43.200 Chinese tourists or people coming from India, it's. 0:04:43.040 --> 0:04:46.120 A lot of people who've got second houses. So London's 0:04:46.160 --> 0:04:49.159 that sort of central hub that people feel safe. They 0:04:49.520 --> 0:04:52.640 come to London for business and they keep a house there, 0:04:52.680 --> 0:04:55.159 but they also come to us and buying the things 0:04:55.200 --> 0:04:56.839 that they can't find anywhere else in the world. 0:04:57.320 --> 0:05:00.040 So what do they buy actually is it a and 0:05:00.160 --> 0:05:03.279 how do they buy? Do they shop through personal shopping 0:05:03.279 --> 0:05:05.119 assistance or do they actually come in store. 0:05:05.560 --> 0:05:09.000 It's a combination of birth. So personal shopping is growing dramatically, 0:05:09.800 --> 0:05:13.200 but people still like that ability to just wander around 0:05:13.279 --> 0:05:16.240 and because we have such a secure building, it's one 0:05:16.240 --> 0:05:18.359 of the few paces that they can walk around without 0:05:18.400 --> 0:05:22.159 security or anyone else. What's happening at the moment is 0:05:22.160 --> 0:05:25.000 people are going to the superbrands, so that mid market 0:05:25.040 --> 0:05:28.279 brand is gradually getting more and more strain, and people 0:05:28.279 --> 0:05:31.360 are really pushing towards the Chanelle, the Deos, the hair 0:05:31.400 --> 0:05:32.720 Mares and the Wheatons. 0:05:33.160 --> 0:05:36.240 So are you seeing that sort of growth in the 0:05:36.320 --> 0:05:40.080 spending of these individuals on those brands. 0:05:40.160 --> 0:05:43.200 Absolutely, I mean you only have to follow the results 0:05:43.240 --> 0:05:46.559 of Wheaton and Hairmers. We've got spectacular growth. The great 0:05:46.560 --> 0:05:49.800 thing about the luxury industry is price insensitive, So if 0:05:49.839 --> 0:05:52.600 you'd invested in I think it's the two point five 0:05:52.600 --> 0:05:55.360 to five Chanell bag, you'd have outperformed the All Share 0:05:55.400 --> 0:05:59.159 index by fifty percent. So it's a great It really 0:05:59.200 --> 0:06:00.960 is a value for life. 0:06:01.160 --> 0:06:03.960 And this, Michael, really goes to the difference between the 0:06:04.040 --> 0:06:06.560 have and the have nots, especially when there's you know, 0:06:06.560 --> 0:06:08.800 we talk about inflation and kind of the cost of 0:06:08.839 --> 0:06:12.960 living crisis. How many, if you'll get your top biggest vendors, 0:06:13.120 --> 0:06:15.360 how much do they make up in revenue? Are they 0:06:15.480 --> 0:06:16.880 really the ones that splash out? 0:06:17.520 --> 0:06:20.120 We never give the figures, but the're vast majority. And 0:06:20.160 --> 0:06:23.479 to your point, the rich get richer and that's the world. 0:06:23.600 --> 0:06:26.040 And of course the other point that we've been benefited 0:06:26.080 --> 0:06:28.599 from this year is we have got a very strong 0:06:28.640 --> 0:06:31.320 presence with the Middle East in shopper and they've been 0:06:31.360 --> 0:06:35.599 the recipients at the other end of our energy crisis. 0:06:36.160 --> 0:06:38.520 Is that the main region where visitors are coming now 0:06:38.560 --> 0:06:43.080 the Middle East. You mentioned China, The Chinese shoppers are 0:06:43.160 --> 0:06:45.080 not yet back in full, is that right? 0:06:45.760 --> 0:06:49.040 Well, the biggest, biggest by volume at the moment is America. 0:06:49.160 --> 0:06:51.520 So we've had a lot of Americans straight after COVID 0:06:51.560 --> 0:06:55.520 coming into Europe. Paris doing particularly well, but fortunately because 0:06:55.520 --> 0:06:57.960 of rioting Parisians. They're starting to come to London from 0:06:58.000 --> 0:07:01.760 more frequently. Least has come back strongly, but not as 0:07:01.800 --> 0:07:05.600 strongly as it was prior to COVID. But China is 0:07:05.640 --> 0:07:07.839 still quite a large proportion of our sales, So about 0:07:07.880 --> 0:07:10.120 ten to eleven percent of our sales are still China. 0:07:10.160 --> 0:07:11.640 Who spends the most test tourists. 0:07:12.000 --> 0:07:15.720 The Americans very seldom spend money in Europe on high 0:07:15.760 --> 0:07:16.520 value items. 0:07:16.600 --> 0:07:17.400 So and the. 0:07:17.360 --> 0:07:19.680 Reason is the American department stores have got a much 0:07:19.720 --> 0:07:23.440 lower markup than the European department stores. So everything, even 0:07:23.480 --> 0:07:26.240 with that is more is cheaper in America than it 0:07:26.280 --> 0:07:27.000 is in Europe. 0:07:27.160 --> 0:07:28.880 And even with the strong dollar, I mean, I guess 0:07:28.920 --> 0:07:31.000 how much has the pound played into this a bit 0:07:31.000 --> 0:07:32.840 as well? I mean it's rallied in recent months, but 0:07:33.080 --> 0:07:35.320 it's you know, after towards the end of last year, 0:07:35.320 --> 0:07:36.200 it was really on the floor. 0:07:36.360 --> 0:07:37.440 Did that actually help you? 0:07:37.880 --> 0:07:40.120 It does, and it doesn't because the brands tend to 0:07:40.120 --> 0:07:43.080 price across the whole of the world these days, so 0:07:43.200 --> 0:07:45.440 they'll adjust the prices in the UK to make sure 0:07:45.440 --> 0:07:47.840 that people are not sort of going backwards and forwards to. 0:07:47.760 --> 0:07:48.480 Buy on price. 0:07:48.840 --> 0:07:51.360 So Dave was looking around on your online store and 0:07:51.400 --> 0:07:55.960 he found a cool ring for a million Does that 0:07:56.040 --> 0:07:58.680 sell or does it just attract eyeballs to the. 0:07:58.960 --> 0:08:01.840 Merrit's birthday is coming out. I was a bit tempted. 0:08:01.720 --> 0:08:05.080 We would tend to sell us more through our personal 0:08:05.120 --> 0:08:09.280 shoppers and direct contact with the sales assistance in the 0:08:09.360 --> 0:08:13.120 store themselves, but no, we do sell at a distance 0:08:13.560 --> 0:08:14.720 million pound rings. 0:08:15.440 --> 0:08:17.960 I mean, that's that is a new that's a new thing, 0:08:18.000 --> 0:08:20.560 isn't it if somebody's spending that much money without actually 0:08:21.080 --> 0:08:23.400 going into a store trying and on looking at it, 0:08:23.400 --> 0:08:25.640 that they're happy. We talked on this podcast about people 0:08:25.640 --> 0:08:27.400 buying houses or WhatsApp as well. I mean, this is 0:08:27.400 --> 0:08:29.080 the world we're in, isn't it that people will do 0:08:29.120 --> 0:08:33.480 these huge purchases and they're comfortable doing it entirely online. 0:08:33.760 --> 0:08:36.880 But I think it's it's also security of the brand. 0:08:37.800 --> 0:08:40.160 When personally is on the phone, they've probably not the 0:08:40.200 --> 0:08:42.600 only thing that they've bought from us, so that this 0:08:42.720 --> 0:08:45.480 is a long term relationship that we've built over years. 0:08:45.960 --> 0:08:48.200 So buying a million pound or a two million pound 0:08:48.440 --> 0:08:51.400 item is not a big issue because they know we 0:08:51.440 --> 0:08:53.400 will honor whatever we need to do to make it right. 0:08:53.440 --> 0:08:55.120 For them and if they don't like it, they can 0:08:55.400 --> 0:08:56.800 they can sell, they. 0:08:56.720 --> 0:09:00.880 Can they can put it on e Bay. Is that allowed, Michael? 0:09:00.920 --> 0:09:02.480 You can't put stuff on a eBay that you bought 0:09:02.480 --> 0:09:02.760 from you. 0:09:02.960 --> 0:09:05.160 I'm not sure that anybody would buy it over there. 0:09:05.880 --> 0:09:07.520 When you look at the luxury brands that are doing 0:09:07.600 --> 0:09:11.160 really well, it's about collaborations but exclusive. It's that I know, 0:09:11.280 --> 0:09:14.040 ten fifteen pounds or Moss bag where you're on a 0:09:14.040 --> 0:09:16.280 waiting list for like two three years. It's that Chanel 0:09:16.360 --> 0:09:18.520 bag that everybody wants but you can't get hold of. 0:09:19.559 --> 0:09:24.520 How much of that exclusivity actually drives the connection with 0:09:24.640 --> 0:09:26.920 your customers. So the fact that they call their personal 0:09:26.920 --> 0:09:28.640 shopper and they say, I want this bag, no one 0:09:28.640 --> 0:09:30.440 can get it. Can you get it to me? 0:09:31.200 --> 0:09:33.440 It's an element of that. But I think the whole 0:09:33.480 --> 0:09:37.480 industry that's sort of rarity in exclusivity is what makes 0:09:37.520 --> 0:09:40.400 this special. So, yes, how personal shoppers have got access 0:09:40.400 --> 0:09:43.520 to stock that other people won't get. But the luxury 0:09:43.520 --> 0:09:46.040 industry has been brilliant at two things, one of which 0:09:46.080 --> 0:09:50.720 it remains cool. So the collaborations are also with streetwear brands, 0:09:52.080 --> 0:09:55.600 so they're there for the younger Generation Z, but they 0:09:55.679 --> 0:09:58.920 also do the collaborations with the older people as well, 0:09:59.040 --> 0:10:01.720 so at both ends the spectrum, they're actually playing to 0:10:01.800 --> 0:10:05.960 that audience and it works so well in terms of desirability. 0:10:06.040 --> 0:10:09.160 And then we keep launching the Kusama collections and each 0:10:09.200 --> 0:10:12.880 one is targeted at a different age group and it's 0:10:12.920 --> 0:10:17.280 just spectacular how they continually engage in the population. 0:10:18.120 --> 0:10:21.360 Are you pulling in the younger demographic into the store 0:10:21.400 --> 0:10:25.280 as well or is it slightly the older, wealthier clients 0:10:25.320 --> 0:10:26.600 who are still no. 0:10:26.600 --> 0:10:26.680 No. 0:10:26.800 --> 0:10:29.520 The gen Z, particularly the International gen Z, are the 0:10:29.520 --> 0:10:31.720 ones with money and they're the ones that will do 0:10:31.760 --> 0:10:35.120 particularly when when China starts to come back online. That's 0:10:35.160 --> 0:10:38.400 the reason we invested so much in beauty, because beauty 0:10:38.480 --> 0:10:42.480 is the first touch of a customer, so we usually 0:10:42.520 --> 0:10:44.880 get the exclusivity of products. So we were the first 0:10:44.880 --> 0:10:47.679 to launch Hermes, we were the first long Gucci were 0:10:47.720 --> 0:10:52.160 launching Prada. All of these builds the relationship with the customer, 0:10:52.320 --> 0:10:55.720 and because we have a CRM system that has eighty 0:10:55.720 --> 0:10:59.160 six percent of our customer's data, we can then move 0:10:59.200 --> 0:11:03.599 them from into small accessories, into bigger leather goods and 0:11:03.640 --> 0:11:04.480 then into apparel. 0:11:04.600 --> 0:11:07.160 Does that happen organically or does a positioning of the 0:11:07.200 --> 0:11:09.719 store help with you know, how you browse and how 0:11:09.720 --> 0:11:12.560 you end up in certain parts of the department store. 0:11:12.640 --> 0:11:15.920 Well, ours was never built as a department store. It 0:11:16.000 --> 0:11:20.200 was actually built as a block of flats. So it's 0:11:20.200 --> 0:11:22.600 not like any other department store that's got a journey. 0:11:23.520 --> 0:11:27.400 It's creation of rooms and that's something that gives us 0:11:27.440 --> 0:11:29.559 the ability to make each one of those rooms special. 0:11:30.040 --> 0:11:31.680 I didn't realize it was a block of flats. So 0:11:32.679 --> 0:11:35.160 when was it converted into a department store? 0:11:35.440 --> 0:11:38.120 After the nineteen twenties all of the leases were taken back, 0:11:38.160 --> 0:11:41.040 but I've got some wonderful photographs of estate agent's boards 0:11:41.320 --> 0:11:44.719 on the Brompton Roads selling mansion flats inherits. 0:11:45.040 --> 0:11:46.840 And then there are the vaults, Dave, have you ever been? 0:11:46.880 --> 0:11:49.040 I've never been, Actually I have been invited in. It's 0:11:49.040 --> 0:11:51.480 my fault that I've never been. But there are vaults downstairs? 0:11:51.960 --> 0:11:55.600 Were you still do you still store gold for customers? 0:11:55.640 --> 0:11:59.320 We have safety deposit boxes which we store whatever our 0:11:59.360 --> 0:12:00.120 customers well. 0:12:01.120 --> 0:12:04.840 Such as how can we not follow up on that 0:12:05.840 --> 0:12:06.160 you need? 0:12:06.760 --> 0:12:09.240 But if you're on my phone, but if you're in London, 0:12:09.320 --> 0:12:11.240 you've got a second house, you'll be wanting to keep 0:12:11.240 --> 0:12:15.000 all of your large quantitative jewelry there. People wanted just 0:12:15.040 --> 0:12:18.080 to keep their watches and things suit like that are there. 0:12:18.720 --> 0:12:21.280 How's London doing, do you think, Michael, compared to other 0:12:21.720 --> 0:12:24.480 big financial and cultural capitals around the world. I mean, 0:12:24.640 --> 0:12:28.840 we've written a lot about Dubai's rise as a you know, 0:12:28.880 --> 0:12:33.480 particularly after COVID and with the war in Ukraine. I mean, 0:12:33.559 --> 0:12:37.160 are you seeing more competition for these these super elite 0:12:37.160 --> 0:12:40.160 shoppers to go elsewhere or that does London still have 0:12:40.200 --> 0:12:40.880 a special place. 0:12:41.440 --> 0:12:44.599 I think London still has a special place, but unfortunately 0:12:44.600 --> 0:12:47.160 we're getting little on nurse support from government on it. 0:12:47.480 --> 0:12:50.760 The government is sort of almost art of moving away 0:12:50.920 --> 0:12:55.400 from the arts and taking funding away, so that creativity 0:12:55.440 --> 0:12:58.960 section we've got to be protect really very strongly. I 0:12:58.960 --> 0:13:01.319 think the secondary is well is. The loss of tax 0:13:01.320 --> 0:13:06.079 free shopping has been a major blur because if I'm 0:13:06.120 --> 0:13:08.880 an affluent person who wants to spend five million pounds 0:13:08.880 --> 0:13:12.240 on jewelry, then I can save million million pounds by 0:13:12.360 --> 0:13:14.960 going to Paris, so I'm going to go to Paris. 0:13:15.480 --> 0:13:19.280 It's a loss of tax free shopping and that diversion 0:13:19.360 --> 0:13:22.120 of money outside of the capital for art is a 0:13:22.160 --> 0:13:24.200 major issue that could hurt us in the future. 0:13:24.640 --> 0:13:25.480 That will change. 0:13:26.160 --> 0:13:28.559 Well, it was supposed to be in trust's budget, but 0:13:28.640 --> 0:13:30.280 that was swiftly reversed. 0:13:30.840 --> 0:13:33.840 So does that how much have you lost in revenue 0:13:33.840 --> 0:13:34.280 because of that? 0:13:34.960 --> 0:13:37.800 Well, it's difficult to really say how much we've lost 0:13:37.800 --> 0:13:40.800 in revenue because we've we had to pivot onto local 0:13:40.840 --> 0:13:43.960 customer But if I look in terms of the tax 0:13:44.000 --> 0:13:48.000 free shopping of the Americans and the Middle East in Paris, 0:13:48.400 --> 0:13:51.079 it's double that of what we're doing in the UK. 0:13:51.320 --> 0:13:54.640 And any signs that the government might listen to to 0:13:54.840 --> 0:13:57.000 your I mean maybe are you logging them at all 0:13:57.120 --> 0:14:00.559 or your industry? Are they actually listening to what the 0:14:00.559 --> 0:14:01.480 retailers are saying. 0:14:01.920 --> 0:14:05.520 We're constantly constantly lobbying, but it's getting it on their 0:14:05.520 --> 0:14:07.880 agenda and what we're actually saying to government is dirt 0:14:07.960 --> 0:14:12.080 change policy. But ask for an independent review because we 0:14:12.160 --> 0:14:14.480 think all of the calculations that they've made have been 0:14:14.559 --> 0:14:17.120 fundamentally flawed. So we want to put it to the 0:14:17.160 --> 0:14:19.760 Office of Budgetary Responsibility. 0:14:18.960 --> 0:14:19.600 To give a view. 0:14:20.120 --> 0:14:21.280 Why do you think they're not listening? 0:14:22.600 --> 0:14:24.480 I think there are so many points that we try 0:14:24.520 --> 0:14:27.280 and engage government with at the moment, and they don't 0:14:27.320 --> 0:14:29.520 seem to listen to many. I mean, there isn't really 0:14:29.520 --> 0:14:32.120 a tourism strategy for London, whereas if you go to 0:14:32.160 --> 0:14:35.720 across the whole of Europe, it's now much better integrated 0:14:35.760 --> 0:14:38.600 across Europe and the whole of shingun So there's a 0:14:38.680 --> 0:14:41.520 number of areas where the government is just misdirected and 0:14:41.560 --> 0:14:42.200 not focusing. 0:14:43.000 --> 0:14:45.240 I guess you know, we've had people on this podcast 0:14:45.320 --> 0:14:48.040 talk about this immedcient weeks that you know, maybe cutting 0:14:48.040 --> 0:14:51.480 the governments some slack. They've had a pretty tall order 0:14:51.560 --> 0:14:53.840 to kind of rescue the economy after the chaos of 0:14:53.920 --> 0:14:56.520 last Jane. You mentioned the trust budget, so they've been 0:14:56.560 --> 0:14:59.960 trying to kind of steady the shape, restore Britain's reputation 0:15:00.720 --> 0:15:05.040 to the bandwidth perhaps hasn't been there whilst the economy 0:15:05.080 --> 0:15:07.080 was looking so shaky. But things are looking a little 0:15:07.120 --> 0:15:10.040 better now, so perhaps might the outlook be a little 0:15:10.040 --> 0:15:12.200 bit rosier for the rest of this year than perhaps 0:15:12.240 --> 0:15:12.560 we thought? 0:15:13.160 --> 0:15:15.560 I would hope, sir, But I think you know, Fred 0:15:15.600 --> 0:15:18.479 I work at them any slack. It's self inflicted wounds 0:15:18.840 --> 0:15:21.120 and the fact that everybody has to run three terms 0:15:21.160 --> 0:15:22.520 as fast now than they used to do. 0:15:23.280 --> 0:15:23.360 So. 0:15:23.840 --> 0:15:26.280 No, you've got to just get yourself in a structure 0:15:26.320 --> 0:15:29.520 that can make proper decisions. And you know, the UK 0:15:29.600 --> 0:15:32.080 can't lag behind the rest of Europe when it comes 0:15:32.080 --> 0:15:36.120 to having a really really strong tourism policy. 0:15:36.720 --> 0:15:38.720 I mean, when I was growing up, it was a 0:15:38.840 --> 0:15:41.000 huge treat for me to come into the Harrod's toy department. 0:15:41.080 --> 0:15:42.840 That's what I used to love doing. You know, all 0:15:42.840 --> 0:15:46.240 the people demonstrating this unbelievable kid now used to buy anything. 0:15:46.320 --> 0:15:47.920 Mind you, it was all quite too expensive, but we 0:15:48.000 --> 0:15:50.040 used to actually goggle it at all. And then around 0:15:50.040 --> 0:15:53.720 the footl that those two areas you haven't mentioned so much. 0:15:54.200 --> 0:15:56.400 The margins are a lot smaller on selling lego or 0:15:56.480 --> 0:15:58.960 selling smoked salmon. Are you going to continue to have 0:15:59.040 --> 0:16:01.600 those departments which sort of pull in the crowds. 0:16:01.960 --> 0:16:05.840 No, We've just refurbished the four food holes back to 0:16:05.880 --> 0:16:08.520 the standards that they were there in the eighteen seventies 0:16:08.560 --> 0:16:12.360 when they were originally built with the original tiles. We're 0:16:12.360 --> 0:16:14.680 investing more and more and more in food. In fact, 0:16:14.720 --> 0:16:18.680 it's one of our fastest growing categories. Everything in the store. 0:16:18.720 --> 0:16:22.080 We have an army of chefs in the basement who 0:16:22.120 --> 0:16:26.600 cook everything fresh every day and it's that sort of freshness, 0:16:26.760 --> 0:16:29.640 newness that are bringing more and more people in. So no, 0:16:29.800 --> 0:16:31.280 it's a very big area for us. 0:16:31.320 --> 0:16:32.640 But how do you try I don't know if you 0:16:32.640 --> 0:16:34.960 track data, like people come in to buy a handbag 0:16:35.000 --> 0:16:36.880 and then get diverted to the food hall or do 0:16:36.960 --> 0:16:39.600 people come in to get a fish cake and then 0:16:39.840 --> 0:16:41.360 get diverted to your store? 0:16:42.320 --> 0:16:44.280 Well, people, what do you do? 0:16:45.320 --> 0:16:48.280 Can I never get diverted obviously, but I. 0:16:48.240 --> 0:16:50.320 Think that But it's the building the relationship, and the 0:16:50.320 --> 0:16:53.040 food holds the relationship. So somebody will be coming in 0:16:53.120 --> 0:16:55.000 two or three times a week to buy their food, 0:16:55.680 --> 0:16:58.520 and on every occasion they'll divert into whether or not 0:16:58.520 --> 0:17:00.880 it's beauty because they need a pick up, or they'll 0:17:00.920 --> 0:17:05.200 go and browse fashion accessories. If you're spending two three 0:17:05.280 --> 0:17:07.560 thousand pounds, it tends to be more of a considered 0:17:07.560 --> 0:17:10.840 purchase that you've you've really thought about and glad to 0:17:10.880 --> 0:17:13.359 hear that, you know. 0:17:13.520 --> 0:17:15.200 One of the things, obviously with Harrod's has been in 0:17:15.240 --> 0:17:17.879 the uniqueness of the venue, and they're in the location. 0:17:18.200 --> 0:17:22.280 You do have some concessions in some airports in various 0:17:22.280 --> 0:17:24.920 places around the world. I saw the one in dohaf 0:17:24.960 --> 0:17:29.480 any recently. Could you ever envisage opening another store somewhere, 0:17:29.760 --> 0:17:31.200 a full, full fledged store. 0:17:31.520 --> 0:17:34.679 No, there's only one Harotz. And really being at the 0:17:34.720 --> 0:17:38.840 international capital of the world is London, you all of 0:17:38.840 --> 0:17:41.680 the crossroads allow you to have that putting it elsewhere, 0:17:42.280 --> 0:17:44.240 you know, bless me, you're in America at the moment. 0:17:44.359 --> 0:17:46.440 Just go next door into Bloomingdale's and have a look. 0:17:46.480 --> 0:17:52.159 It's a disaster. I couldn't possibly que But what. 0:17:52.040 --> 0:17:54.679 We've done is we've spent every year, we spend fifty 0:17:54.680 --> 0:17:58.720 to sixty million pounds, making it the most stunning emporium. 0:17:58.920 --> 0:18:02.120 And that's that's what makes it special. It is really 0:18:02.160 --> 0:18:03.360 the Palace of Knightsbridge. 0:18:03.400 --> 0:18:05.439 And this is because you're also backed by Qatar, so 0:18:05.480 --> 0:18:07.040 at the moment money is limitless. 0:18:07.440 --> 0:18:10.119 Well, we never have drawn a penny from Qatar. We 0:18:10.200 --> 0:18:11.680 generate everything ourselves. 0:18:11.880 --> 0:18:14.119 Michael, who's your biggest competitors. 0:18:13.720 --> 0:18:17.160 Our arrivals at the individuals stores themselves. But nobody has 0:18:17.320 --> 0:18:21.400 continued this investment to create this. As I say, it's 0:18:21.400 --> 0:18:23.680 just something that's special and unique, whether or not it 0:18:23.720 --> 0:18:26.960 be the food holes or whether or not you can 0:18:27.000 --> 0:18:30.320 walk in there and buy the most amazing diamonds from 0:18:30.359 --> 0:18:33.000 every one of the major jewelers in the world. It 0:18:33.040 --> 0:18:34.399 doesn't happen anywhere else. 0:18:35.080 --> 0:18:38.159 And do you think all of those other competitive centers, 0:18:38.200 --> 0:18:42.639 And we've talked about Paris multiple times, do you think 0:18:42.720 --> 0:18:46.439 that the UK government and perhaps with the economic situation improving, 0:18:46.440 --> 0:18:49.080 do you think London's going to reassert itself. I think 0:18:49.080 --> 0:18:51.600 you just called it just now the capital of the 0:18:51.640 --> 0:18:53.440 world in some respects. Do you think that's going to 0:18:53.480 --> 0:18:55.280 continue for the full sillable future. 0:18:55.480 --> 0:18:59.320 If we can start to get more investment back into 0:18:59.480 --> 0:19:02.919 the areas that we touched on earlier, such as making 0:19:02.920 --> 0:19:06.680 sure that our creative industries continue to rule the world 0:19:06.920 --> 0:19:09.240 and that we have this growth in the soft power, 0:19:09.720 --> 0:19:12.800 we have a stable environment which people come to. As 0:19:12.920 --> 0:19:16.560 I touched on earlier, the fact that Paris is constantly 0:19:16.720 --> 0:19:20.199 on problems is the biggest thing that drives particularly the 0:19:20.200 --> 0:19:22.919 Middle East and customer away from Paris and into London. 0:19:23.320 --> 0:19:27.720 So stability of law, great culture is really the key 0:19:27.760 --> 0:19:29.600 to making sure that London remains here. 0:19:29.760 --> 0:19:31.639 Why do you worry about the creative industry? Is that 0:19:31.640 --> 0:19:34.000 Brexit related or is that just government funding. 0:19:34.280 --> 0:19:35.240 It's government funding. 0:19:35.760 --> 0:19:37.920