More investment is set to be made at Fenwick’s Newcastle department store after the firm sold its main London shop in a deal understood to be worth £430m.
The family-owned retail empire – which includes eight stores around the UK including its flagship Northumberland Street shop – has traded from Bond Street since the 1880s but the store is one of its smallest and takes just half the sales that the Tyneside store brings in. Now, following a challenging time in retail which has been exacerbated by the pandemic, the company has taken the decision to sell the building and an adjoining property.
Fenwick has not confirmed the sale price agreed with Lazari Investments, but it is understood the property was sold off a guide price of £430m. The store will close at the start of 2024. Around 200 people work there, including 100 function staff who will move to a new office. Efforts will be made to relocate the remaining 100 shop floor employees to other stores.
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Fenwick said it will use proceeds of the deal to fund a number of significant investments in Fenwick stores, including its Newcastle flagship store and its Kingston store. In Newcastle, investment has already been made on the shop floor, replacing outdated escalators with a new central atrium “to transform the shopper experience”. Other plans include adding cash to the pension fund, repaying debt and firming up a strong balance sheet for the business - and a portion of the proceeds will also be shared with employees, while the surplus will be returned to shareholders.
The deal comes two months after Fenwick published its latest accounts, covering the year ended January 28 2022, in which it narrowed its operating losses to £18.3m, and net sales showed “considerable improvement”, rising 69% to £201.3m. But amid the current economic environment, it said that fresh capital investment was needed to return the business to profitable growth.
CEO John Edgar said: “The capital injection from this transaction will put Fenwick in a much stronger position to grow its online business and concentrate on cementing our position as the home of excellent hospitality and a premium retail edit. After considering a range of different options, it was decided that selling the Bond Street property is the right course of action to set us on the strongest possible footing for the future.”
Simon Calver, chair, said: “This year Fenwick marked 140 years as a successful British retailer, and this deal will enable the business to continue to serve communities in stores and online for many years to come. The sale has been a difficult decision for the Fenwick family, who are committed to providing the business with the means to thrive for the long term. Their support will enable the next stage of the journey for the Fenwick family business.”
Fenwick retains eight stores across the UK in Newcastle, Kingston, Brent Cross, Colchester, Canterbury, Bracknell, Tunbridge Wells and York alongside its growing online platform.
Lazari Investments is said to be planning a mixed-use development at the London site once the store closes.
David Silverman, director of Lazari Investments, said: “The Fenwick store and adjoining properties are a landmark collection of buildings on the world-renowned Bond Street. We are delighted to have entered into an agreement to purchase them.
“We look forward to creating a mixed-use development adopting the very highest standards of sustainable design. We are extremely grateful to Cale Street Investments for providing the finance for this acquisition and their partnership throughout the transaction. The purchase is set to complete early next year. Fenwick will continue to occupy and trade from the store until at least 2024.”
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