A higher demand for luxury goods has Harrods enjoying a run in profits Famous for its unlimited luxury goods offer, more high spending customers have seen the leading department store post a strong performance this season.

Pre-tax profits rose from GBP7m to GBP19.9m in the year to January 31, with record second-half trading at the landmark Knightsbridge store offsetting a tougher sales environment earlier in the year. Operating profit more than doubled to GBP33.4m on turnover of GBP472.5m.

Harrods said the business saw its strongest second half growth since the store was founded in 1849, with a year-on-year increase of 13 per cent in October alone. The store had suffered from the fall in visitor numbers after the terrorist attacks in the US, but has seen sales driven by greater demand for luxury goods, and insisted that only 25 per cent of its trade comes from tourists.

Harrods owner and chairman Mohamed al Fayed received a dividend payment of GBP27m. He said: "I am pleased to announce good progress for 2004 which has continued since the close of our financial year - with healthy double digit trading increases since last year. "This is testament to the unique Harrods brand and the quality of our employees who remain committed to giving our customers the products, service and shopping experience they have come to expect only from Harrods."

Changes initiated by new chief executive Richard Simonin included a revamped womenswear offer, featuring designers including Jonathan Saunders, Gharani Strok and Sophia Kokosolaki, and the introduction of new fashion brands like Rock & Republic. Vera Wang and Oscar de la Renta were introduced to the revamped evening wear department.

The second half of 2004 will see a complete overhaul of the menswear departments and a new international Room of Luxury, offering fashion accessories from brands including Jimmy Choo, Marc Jacobs, Valentino and Dolce & Gabbana.