North East department store chain Fenwick has seen its losses widen after tackling “the most difficult trading conditions in living memory” during the pandemic.
The Newcastle headquartered family firm, which has nine stores around the 海角视频 including its flagship Northumberland Street shop, saw gross sales for the year to January more than halve, from £323.7m to £140.5m.
Turnover fell from £218.06m to £98.23m and operating losses before exceptional items widened from £11.8m to £44.99m. After exceptional items this figure grew to a loss of £111.7m.
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The company recounted how sales tumbled after it was forced to close its stores during what should have been peak trading times. All told, stores were closed for 21 weeks during the year.
In a report accompanying the accounts, directors said: “The lockdowns coincided with what would’ve been the peak selling and most profitable periods. Net sales fell by more than 50% to £119m. Given the pandemic it was necessary to reduce the level of stock by taking significant discounts. Together with significantly lower sales, this reduced the gross profit of the group by almost £60m.”
Fenwick has claimed £9m in furlough support from the Government and £8.7m in business rates relief to offset some of the impact from the pandemic, as well as cutting its costs by making 280 redundancies, taking the average workforce figure from 1,911 to 1,631.
It also warned that due to the impact of Covid-19, the business will make a further loss in the coming year, leading the group to put in place a three-year secured borrowing facility to ensure sufficient funding.
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In terms of the future outlook, the firm said it had set significant growth targets for its online business over the coming year, and as it faces significant and growing competition from online retailers it aims to differentiate itself with a “high level of service and a tailored offering”.
New CEO John Edgar was appointed in April 2020 at the start of the pandemic, and has sought to put each regional store at the heart of its local community, while bringing in new brands, especially within high-end leisurewear, and investing in store fit-outs.
In Newcastle, Fenwick has been supporting local producers and suppliers through in-store pop up ‘Fenwick Exchange’ market and since the year end has opened its rooftop restaurant Roof Thirty Nine. It also unveiled its famed Newcastle Christmas window display virtually, watched by almost 1m people around the globe.
The accounts say: “The group has seen a positive reaction in response to new fashion brands and the refocused home offer that have been introduced to respond to changes in consumer behaviour during the pandemic.
“Similarly the food and restaurant offer has benefited from the customers change in spending habits. The business is focusing its efforts on targeted communications across all channels, and increased brand visibility driven by new brands with narrow distribution.
"Customers have responded positively to safety measures introduced in all stores last year and are citing Covid safety measures as a key driver in choosing where to shop.”
Following publication of the accounts, Mr Edgar added: “These results reflect the challenges that the retail sector faced in 2020.
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“I’m very proud of the way the Fenwick team adapted to these challenges to provide customers with our trademark Fenwick hospitality, rapidly scale up our online offer and introduce new services such as concierge.
“We are now focussed on ensuring our nine stores and website continue to build stability and serve our local communities in the year ahead.”
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