Since his controversial takeover of Britain's most famous department store in 1980, Al-Fayed (who, true to his eccentric form, is currently suing Westminster Council for not letting him be buried as a mummy on top of Harrods after his death) has spent millions of pounds on security. He has even installed a US National Security Agency-like control room full of computer and TV screens to make him feel at ease with his employees and spot potential shoplifters.
“We’ve had a lot of problems with staff and customers stealing from us, so to have maximum security is definitely one of the Chairman’s highest priorities,” says Michael Mann, Harrods media relations manager, as he browses through his daily pile of newspapers looking for potential journalists to sue over misquotes and lies about the posh place and its serially litigious owner.
The PR chief admires his view overlooking Brompton Road and Hyde Park in Knightsbridge and adds: “As Harrods now is the second largest tourist destination in London after Buckingham Palace, more and more people enter the store every year. To keep on top of that we must focus a lot on security in the building.”
Hence the surveillance cameras in the wax work?
“Well, the CCTV coverage near door three was a bit weak anyway so a little improvement is always good,” he says.
Harrods was recently voted premier shopping destination in the world by the business magazine Forbes, with a nomination that read: “It’s the world’s only luxury department store which sells everything from animals to £1m diamond-encrusted shoes; it is also the only department store with a £20m Egyptian escalator.”
So, how does a world famous department store like this treat its 3,500 employees?
Hemel Parmer is a 26year-old sales associate in the men’s suits department and has been working for Harrods for four years. He isays, with astonishing frankness: “Employees are no way near as well-treated as the customers. They (management) make us work extra hours without getting paid and they expect us to walk the extra mile for the customers. But Harrods never, ‘with a big n’, walks the extra mile for their staff.”
He adds: “We also feel watched all the time. Security sometimes comes down to tell us that they can see us through CCTV reading letters or newspapers behind the counter, and that’s a bit scary.”
“A while ago I forgot a security tag in a customer’s bag for the first time. Instead of giving me a verbal warning or explaining the problem they just took away my commission for that week.” The commission for Harrods staff is one per cent on everything they sell, explains Parmer.
Parmer gives examples of the company's behaviour towards its staff: “My colleagues and I were furious when they recently scrapped the pension scheme, and on top of that, a while ago we all had to stay an extra half hour on the shop floor for a few weeks because security was investigating missing stock from men’s wear – unpaid of course.”
But for the pampered bosses at the store it is a different story. They benefit from the exorbitant sale of goods like perfume at more than £100,000 a bottle with fat profit-related bonuses after the bumper pre-Christmas trading. Last year the company paid Mohamed Al-Fayed a dividend of £39m on profits of £41m. But Harrods said a few weeks ago that its final salary pension scheme for staff was unaffordable and must be ended to safeguard the future of the upmarket London store.
Harrods pointed to a deficit of £111m on its pension fund as the spur for a review of contributions by the company. It announced proposals to staff for a shift to a cheaper money purchase scheme and a cut in company contributions by almost half. Trade union representatives at the company said that the move will result in “steep cuts” in pension payouts to 1,500 members of the scheme.
Harrods was established in 1834 in London’s east-end, when founder Charles Henry Harrod set up as a wholesale grocer in Stepney, with a special interest in tea. In 1851 Harrod took over a small shop in the new, more fashionable London district of Knightsbridge. From a single room employing two assistants and a messenger boy, he transformed Harrods into a thriving store selling machines, perfumes, stationery, fruit and vegetables, that employed 100 people by 1980.
But the store's fortunes changed in 1883 when it burned to the ground early in December. Still, Harrod still fulfilled all its Christmas deliveries and soon a new building was built.
The Harrods family decided in 1889 that they had had enough of retail and the store became a public business. During the boom of 1890 new departments were added – including the Harrods bank and estate agency – as well as the first sale or “winter clearance”, in 1894. Managing director Richard Burbidge introduced the world’s first escalator in 1898 which had brandy at the top to revive nervous customers.
In 1980, the Al-Fayed family acquired the House of Fraser Group for £615m, after a bitter fight with industrialist rival Tiny Rowland, and Harrods became a family business once again. Mohamed Al-Fayed has a reputation for hiring busty blondes (he is married to a reclusive former Finnish beauty queen). After becoming chairman of the company he immediately initiated a £300m refurbishment and security plan.
The nanny state of prime minister Tony Blair is increasingly one where 'Big Brother' wants to watch people's every move like Mohammed Al-Fayed and Co. So, perhaps it’s no surprise then that the government that runs this nation of shopkeepers – as Napoleon famously referred to Britain – now wants to introduce ID cards and and even more CCTV surveillance, Harrods-style.