Department store business Fenwick increased sales and cut losses last year as it turned pandemic challenges into opportunities by changing its business model.
Fenwick chief executive John Edgar told Retail Week the retailer was able to “get off the drug of discounts”, focusing instead on full-price sales of brands exclusive to it in the locations where it trades.
Fenwick’s gross sales climbed 71% to £240m in the year to January 28, accounts being filed at Companies House showed.
Operating losses were more than halved from £45m to £18.3m, while at a pre-tax level the loss was down 95% to £5.2m. Store sales “rebounded” in the second half after lockdown restrictions lifted and the retailer upgraded its online proposition.
Edgar said: “What the year showed was that we made a pretty strong recovery during the pandemic.
“It demonstrated that the model we’re trying to impart, which is the strength of our regional business, the importance of digital – and we didn’t really have a digital business until two-and-a-bit years ago – and the focus that allows us to put on full-price trading seems to be putting us in the right direction.
“When you bring that into the current year it puts us in a much better place than we would otherwise have been. Historically there has been too much of a race to the bottom. During the pandemic, we got ourselves off that drug of discounts. The pandemic gave us the opportunity to change the model significantly, to do a big reset.”
Fenwick is continuing to invest this year, including upgrading its Newcastle flagship where a new atrium will be opened next month as part of a £40m investment, and the addition of new exclusive brands.
Edgar said he was “confident without being unrealistic” about Christmas prospects. He believed Christmas may come late because pandemic factors that promoted early spending last year – such as stock shortages and the outbreak of the omicron variant – are not at play. Christmas Day being on a Sunday should also help retailers.
He said: “This financial year there’s more sleeping policemen, more bumps in the road, headwinds – whatever you want to call it. Nobody, no matter how clever they say they are, would have foreseen a war in Ukraine and the impact that’s had around the world, and then a few self-inflicted wounds the UK’s managed on top of that.”
However, he maintained: “We’re positioned very well to have a great Christmas.”
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