Selfridges returned to profit in its last fiscal year as its boss reiterated his call to restore tax-free shopping for international visitors.  

The high-end department store chain said stronger in-store sales and tighter cost control helped it deliver a sharp improvement in its annual performance.

The business posted a pre-tax profit of £13million for the 52 weeks to January 3, 2026, against a £15.9million loss a year earlier. 

Revenue rose seven per cent to £830.8million, while the firm's operating profit jumped 88 per cent to £79.7million as it benefited from higher margins and increased sales across its stores.

The results represent a marked turnaround for Selfridges, which last year reported its fifth consecutive annual pre-tax loss after revenues fell to £775million. The prior reporting period covered 48 weeks, rather than 52.

André Maeder, chief executive of Selfridges, said the performance demonstrated the retailer’s 'resilience amid a challenging economic and retail environment'. 

He said those challenges had been 'made more difficult by policy choices, such as the abolition of tax-free shopping for international visitors.' 

He added: 'We are therefore hugely encouraged to see this back on the political agenda and urge the government, under new prime minister Andy Burnham, to bring back tax-free shopping, boosting high streets and unlocking growth across the whole of the UK.'

The VAT Retail Export Scheme allowed overseas visitors to get a VAT refund on items they had bought in the UK and took home in their luggage. 

The scheme was scrapped for non-EU visitors under the previous Conservative government in 2021, while it was also not extended for EU visitors.  

Now, the Conservatives have said they would reintroduce tax-free shopping for international visitors. 

Leader of the Conservatives, Kemi Badenoch, who was a Treasury minister when the tax relief was abolished, said businesses were being 'let down by a tax policy that is chasing their customers away'.

But Labour accused the Conservatives of 'a spectacular U-turn'. 

Research by the Centre for Economics and Business Research this month said fully restoring tax-free shopping for tourists could attract up to 2.35million extra visitors and generate £4.1billion in extra spending.

The report also estimated that for every £1 of VAT refunded, this could generate £1.54 in other taxes.

Andy Burnham is facing pressure from large UK retail and luxury brands, like Burberry and Mulberry, to reintroduce tax-free shopping for international visitors by bringing back the VAT refund scheme that was abolished in 2021.