2017's first UK retail casualty as Fenwick closes Leicester store
Further evidence of the structural shift taking place in UK retail came on Thursday as department store chain Fenwick said it would close its lossmaking Leicester store. At the same time it announced it would make a late-to-the-party e-commerce debut.
The company said its long-established Leicester branch - which it has run since 1962 - would close after struggling for some time. The store is likely to close in March.
Mark Fenwick, who is the fifth generation of the founding family to run the chain, said: “Despite all attempts to find a solution we are losing money and have been for some time, and we’re proposing to close the store, which obviously will perhaps mean redundancies.”
The company had warned late last year that it was seeing “extremely challenging” times in the retail sector. Mark Fenwick added Thursday that the Leicester branch had suffered from changes in the city’s shopping district as well as the rise of online shopping. The Market Street area where Fenwick is located has been hurt by the Highcross and Fosse Park shopping centres that have easy access and plentiful parking.
But UK stores in all locations are suffering at the moment with shopping centres also under pressure. The retail sector saw footfall dropping significantly over the Christmas season as British consumers migrated online faster than in any other country.
Fenwick has been unable to benefit from this migration as it only has an information website. Addressing its lack of e-commerce, the chairman said the company would be “soon be opening a new digital platform”.
Fenwick is one of the few big name UK retailers not to operate an e-tail site. Rival department stores have long realised that online is a key growth channel with buoyant rival John Lewis saying over a year ago that online sales would outstrip physical store sales for its business by 2019.
No other Fenwick stores are believed to be slated for closure at present. The 11-store chain has a flagship on London’s New Bond Street and mostly operates in southern England, although it also has stores in the north, in York and Newcastle. Leicester is its only store in the Midlands. The company is profitable but in its most recent year, operating profit fell from £26.8m a year earlier to £25.4m.
Mark Fenwick added: “This has been a very difficult decision for us, as we have been committed to serving the people of Leicester for over 50 years, but the challenging trading environment and gradual loss of footfall, has made it impossible for us to find a way forward that enables the business to trade successfully. Looking after our Leicester employees and customers will now be a top priority.”
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