Harrods has allocated more than £62 million to compensate individuals who allege they suffered abuse by former owner Mohamed Al Fayed. The luxury department store expects over 100 former employees to claim compensation of up to £385,000 each through the redress scheme, which remains open until March 31, 2026.[1][2]
Compensation Program Details
The scheme launched on March 31, 2025, provides compensation to victims who assert they experienced abuse at the hands of Al Fayed, who passed away in 2023. Al Fayed owned the upscale London retailer from 1985 to 2010, during which time numerous women have made allegations including rape and sexual assault.[3][4]
Harrods has set aside £57 million to directly compensate alleged victims, plus an additional £5.3 million allocated for legal and administrative expenses, totaling £62.3 million.[5][6]
Managing Director Michael Ward stated that compensation awards and interim payments began being distributed to eligible survivors at the end of April 2025. Ward confirmed that more than 100 survivors have engaged with the scheme since its launch.[7]
Award Structure and Eligibility
The compensation program provides each qualifying claimant with general damages of £200,000. Claimants may receive up to £385,000 in total compensation plus costs for treatment, contingent upon their agreement to undergo evaluation by a consultant psychiatrist. Those who decline medical assessment could receive as much as £150,000 without such evaluation.[8][9]
To qualify for the scheme, claimants must demonstrate they experienced sexual assault or wrongful testing and establish Harrods liability. Many individuals who allege abuse by Al Fayed underwent invasive medical examinations during their hiring process. By accepting a compensation package, victims relinquish their right to seek further damages.[10]
Investigation Status
The Metropolitan Police reported that 146 individuals have stepped forward to report incidents during their inquiry into Al Fayed. The investigation continues as authorities gather evidence related to the allegations spanning his decades of ownership.[1][3]
Financial Impact on Harrods
The compensation scheme has significantly affected Harrods financial performance. The company reported a loss of £36.5 million for the fiscal year ending February 1, 2025, marking a dramatic reversal from the £76.7 million profit recorded in the previous year.[11][12]
The establishment reported a £34.3 million pre-tax loss in its most recent annual financial statements, a stark contrast to the £111 million profit recorded the year prior, partially attributed to the compensation scheme.[13]
Revenue for the financial year 2024 remained relatively stable at just above £1 billion. However, the decline in profits was attributed to weaker performance in beauty sales and the modernization of various systems. Operating profit before exceptional items dropped to £177.7 million from £213.9 million.[14][15]
Company Response
In its announcement regarding the scheme, Harrods expressed commitment to accountability. The company stated it cannot alter the past but is committed to acting rightly as an organization, guided by current values, and ensuring that such actions are never repeated.[16]
Ward acknowledged the difficult trading environment, noting that current domestic and global economic conditions mean that trading conditions in the luxury sector remain challenging. He expressed confidence in the business fundamental strength, the luxury sector resilience, and the store ability to achieve long-term growth targets.[2][7]
