The world famous retailers’ worst-case scenario became reality last week when its Knightsbridge store was forced to close
Luxury department store chain Harrods has been forced to reorganise its £200m credit line as England’s second lockdown puts it at risk of breaching covenants.
A report by The Sunday Times said the world renowned retailer had previously renegotiated a revolving credit facility with the Qatar National Bank in August, so not to violate the agreement in April.
But Harrods’ worst-case-scenario, the closure of its Knightsbridge store, materialised last week when the UK government ordered all non-essential retailers to close to curb infections of Covid-19.
However, the retailer, which is owned by Qatar’s royal family, said it had sufficient cash for the foreseeable future, despite having to shutter its stores for more than 80 days during the first nationwide lockdown.
Harrods made the difficult decision back in July to cut 10% of its workforce across parts of the business most affected by the pandemic.
In a letter to his employees at the time, Managing Director Michael Ward said that the decision was made “with a heavy heart” and that the last few months of lockdown has been a “terrible period for the country”.