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Fenwick calls in restructuring experts as losses mount and costs rise
Fenwick has enlisted restructuring experts from AlixPartners to help address ongoing financial challenges
Fenwick has enlisted restructuring experts from AlixPartners to help address ongoing financial challenges, as the department store chain faces mounting losses and cost pressures.
The family-owned retailer, which operates eight department stores across the UK, reported a pre-tax loss of £38.1m for the year to January 2024, following a 5.2% decline in sales.
This comes after a £28.4m loss in the previous year, reflecting a broader decline in performance. The company has been in the red for the past six years, with high inflation, increased costs, and tough market conditions cited as contributing factors.
Fenwick has been focusing on reducing costs and improving its operating model, especially in the online space, in an attempt to return to profitability. However, heavy discounting from competitors has impacted its ability to contain costs and maintain margins.
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The retailer recently opened a newly renovated 26,00sq ft beauty hall in its Newcastle flagship store, part of its strategy to boost in-store offerings and attract customers. Despite these efforts, Fenwick’s financial struggles have led to ongoing concerns over the future of its stores and workforce.
A spokesperson for the company told the Times there were currently no plans for store closures but acknowledged the need to carefully monitor costs. Fenwick’s restructuring plans are expected to focus on improving efficiency across both its physical and online operations.
In 2022, the retailer sold its flagship Bond Street store for £430m, using the funds to strengthen its balance sheet and invest in its stores and online business.
Fenwick is not alone in facing these issues. Several other major UK retailers are making similar moves to adjust to the tough trading environment.
WHSmith is looking to sell off its high street arm, New Look is accelerating store closures, and Poundland’s owner Pepco has put the struggling discount chain up for sale, highlighting the widespread pressure on the UK high street.
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