Harvey Nichols forecasts record profits Harvey Nichols, the luxury department store group, said a mix of £65,000 alligator skin handbags, face cream and a focus on "timeless" rather than cutting-edge fashion should produce record profits this year, capping a comeback from its 2008 decline. With the west's super-wealthy cutting back on their expenditure, the store chain had adapted to attract new customers, said Joseph Wan, the company's chief executive. Speaking at a lunch organised by Manchester Business School at the city's Harvey Nichols store, he said that the result would be record profits in the year to March 2012, beating the £18m posted in the boom year of 2007/2008. "We have adapted since the collapse of Lehman [Brothers] in 2008," he said. We didn't talk about when the good times would return. Instead we talked about the way we must recognise that things have changed. The wealth of western consumers had been dented, possibly permanently, he added. In addition to opening stores in fast-growing Asia, the company has broadened its fashion offering and will soon introduce its own clothing brand. Mr Wan told the Financial Times that Harvey Nichols" London flagship store in Knightsbridge was the group's top performer. Sales at its UK regional outposts in Manchester, Leeds, Edinburgh, Bristol and Birmingham were up 4-5 per cent year on year, while Dublin posted only a 1 per cent increase. Harvey Nichols will open its 14th store this year, in Kuwait City, and also has outlets in Hong Kong, Turkey, Saudi Arabia and Dubai. South America, probably Brazil, is expected to be the group's next target. The company also plans to open a cosmetics-only outlet in Liverpool. "In an economic slowdown people first stop buying clothes, then shoes, then handbags and the last thing they cut back is what they put on their face," said Mr Wan. He said the stores had added more breadth to their ranges. In the past, Harvey Nichols was very much the latest fashion. We didn't have space to stock more timeless elegance. We have to attract new customers. Recent popular additions include See by Chloé, McQ by Alexander McQueen and baby alligator skin handbags by Lana Marks. The company now had the scale to contract directly with manufacturers to produce clothing and accessories under its own label, said Mr Wan. We are going to work with the top manufacturer in each area. It will have the Harvey Nichols quality but at a lower price point than the brands we sell. Turnover for the year was likely to be £160m, excluding concessions, and the company had a strong foundation for growth despite continued austerity. Harvey Nichols, listed until 2003, is owned by Hong Kong-based businessman Dickson Poon. The group suffered a 40 per cent drop in profits from £18m to £10m in the year to March 2009.