Fenwick reports £28.4m loss after West End store closure

Fenwick, which closed its store in London’s West End this year, has reported a pre-tax loss of £28.4 million for 2023.
Though the previous year’s figures showed a pre-tax profit of £57.1 million, this included £97.5 million as an exceptional item from the sale of its store in Bond Street.
In its accounts for the 52 weeks to January 26, the company said that turnover had dropped to £184.2 million in 2023 from £199.7 million in 2022. While it did not comment on the sale price, agents believed that it fetched about £430 million.
The retailer operates eight stores across the UK. The Bond Street store made less than half of the sales of Fenwick’s bigger shops in Newcastle, Brent Cross and Kingston upon Thames. The store officially closed in February.
The company said that the market environment “continued to provide a challenging backdrop to sales” as the effects of the war in Ukraine weighed on the company’s supply chain. At the same time, high mortgage rates and inflation exacerbated the cost of living crisis, which has hit department store sales.
Fenwick added that its sales further deteriorated because of heavy discounting by its competitors in the final quarter of the year — impacting its own ability to limit discounting and contain costs relative to sales.
The department store chain has also faced what it called “significant and growing competition” from online retailers. Luxury specialists such as Farfetch and Net-a-Porter have cut into the bottom lines of high-end retailers.
Fenwick added that over the next year, the company will continue to improve its operating model, with a particular focus on its “ever more efficient” online offering.
The end of the VAT-free shopping scheme, which was abolished in 2021, has also impacted footfall at its stores.
Last year, John Edgar, then the company’s chief executive, warned that VAT-free shopping “isn’t only a London issue” and that reinstating the scheme would bring more tourists back to the UK’s big cities including Newcastle, where the company has its flagship store.
The company traces its roots back to 1882 when John James Fenwick opened a shop selling dresses and fabrics from a renovated doctor’s house in Newcastle. It is still jointly owned by about 30 members of the family.
The company said it is “focused on returning to profitability across its operations”, adding that it will continue to develop its Fenwick at Home range, including its own-label food products and restaurant offers.
It added it would focus on preserving margin on the products it offers and building upon the “dominant” position it has in local markets.
Details of Fenwick’s financial performance come as it continues its search for its third chief executive since 2018 after former Harrods executive Nigel Blow chose not to take up the role.
Blow was poised to take over as chief executive this month but has stepped away amid controversy about the alleged behaviour of the late Harrods owner Mohamed Al Fayed.
Fenwick declined to comment.