Harrods boss Mohamed Al Fayed has seen losses widen and sales slip at his Paris Ritz Hotel, figures showed today.
The exclusive hotel was hit by a slide in business following the 9/11 attacks in the US, it was revealed in accounts filed at Companies House.
Pretax losses at the exclusive hotel nearly doubled to ¬3.7m (£2.3m) in the year to 31 December 2001, against ¬2m (£1.3m) the previous year.
Sales also fell, down from ¬57.7m (£36.5m) to ¬56m (£35.4m).
In the report the company said the average annual occupancy rate at the hotel fell from 83.3% in 2000 to 75.3% in 2001.
It said this was “as a result of the declining business activity experienced in the luxury hospitality market in France since the beginning of the year and as a consequence of the terrorist attacks in the US on 11 September”.
The figures showed that losses were hit by an increased interest bill during the year.
Interest, and similar charges, stacked up to ¬7.5m (£4.7m) against ¬5.2m (£3.3m) the previous year.
However losses were expected to be reduced next year.
In the group’s statement it said: “Due to the non-recurring nature of some of the refinancing charges incurred in 2001, the directors anticipate that the net loss will be reduced in 2002.”
In June, multi-millionaire Al Fayed said in an interview he had used his personal fortune to help fund the Paris hotel.
In the interview with the Financial Times, Al Fayed said he had used his international oil and mining interests to fund the hotel as well as Harrods and his Fulham Football Club.
Fulham Football Club plunged deep into the red last year, making a loss of £23.3m after its wage bill soared.
And in the June interview Al Fayed also admitted to a “significant downturn” in shoppers at Harrods, following the events of 11 September 2001.
Harrods’ profits for the year ended January 2002 were expected to be down on the previous year’s £29.1m, and recovering to £30m this year.
Harrods’ much-speculated plans to float on the stock exchange are now seen as unlikely, but Al Fayed told the paper taking the store public remained “a possibility”.
In addition, earlier this year, the Egyptian-born businessman lost a legal battle to retain his special tax status.
EGi News 29/10/02
