Fenwick, a high-end department store group, has suffered significant losses during the COVID-19 pandemic, as revealed by its latest financial results. Unlike some of its competitors, Fenwick did not have a well-established online platform to cushion the blow of store closures caused by lockdown measures. As a result, the company’s pre-tax losses rose from £47 million in 2019 to £112 million, while sales dropped from £323.7 million to £140.5 million.
The temporary closure of Fenwick’s nine department stores, including its flagship location on London’s Bond Street, had a devastating impact on the business. Fenwick’s CEO, John Edgar, who took on the role last year, acknowledged that one of the major challenges faced during the pandemic was the underdeveloped and inactive state of the company’s online operations. Previous management had scaled back online activities to save costs, ultimately leading to a complete shutdown at the onset of the crisis. This decision resulted in the loss of 300 jobs.
To mitigate the damage caused by the pandemic, Fenwick took advantage of government support schemes. The company received £9 million in furlough support and £8.7 million in business rates relief. However, the retailer’s pension deficit increased by £7 million, reaching a total of £36 million during the same period.
Despite the difficulties faced, Edgar highlighted the significance of Fenwick’s digital ambitions in driving future growth. Currently, approximately 80% of the company’s products are available for purchase online, and the CEO aims to make e-commerce account for a fifth of Fenwick’s total revenues. He emphasized that department stores have the potential to offer a wide range of products, similar to their online counterparts, and referred to them as “the original marketplaces.”
Edgar also stressed the importance of Fenwick’s physical stores in sustaining the business. While the Bond Street store experienced a decrease in footfall due to the absence of office workers and tourists after the lockdowns, other Fenwick stores benefited from local customers. The CEO highlighted that in certain areas, Fenwick remains the top luxury retail option.
Overall, Fenwick’s financial results serve as a stark reflection of the severe impact of the pandemic on the retail industry, especially for companies without a strong online presence. As Fenwick focuses on digital expansion while valuing its physical stores, the aim is to navigate the evolving retail landscape and drive future growth.
2 useful links:
1. BBC News: Fenwick suffers severe losses due to pandemic impact
2. The Guardian: Fenwick records £112m loss due to lack of online presence
