Fenwick hires restructuring experts amid Budget pressures

Fenwick has hired restructuring experts to help address ongoing financial challenges, as it faces cost pressures as a result of incoming Budget measures. 

The family-owned department store chain is working with advisers from AlixPartners on plans to slash costs after years of losses, according to The Times.

Fenwick currently operates eight department stores across the UK, including in its home town of Newcastle, London’s Brent Cross and Kingston upon Thames, Bracknell, York, Canterbury, Colchester and Tunbridge Wells.

A spokesperson for Fenwick said there were no plans for store closures.

"Like all retailers at the moment, we are keeping a close eye on our costs, especially in light of the tax and minimum wage increases in last October’s budget," the retailer told the publication.

The news comes after Fenwick reported a pre-tax loss of £28.4 million for the year ending 26 January 2024, blaming the cost-of-living crisis and a changing retail environment for its performance.

The financial struggles of the retailer also previously spurred the sale of its Bond Street store in London’s West End for £430 million in 2022. It used the proceeds to pay into its staff pension fund, repay debt, pay a dividend to family members, and invest in its stores and online business.

However, a source close to the company told The Times that Fenwick has just delivered its best six-month trading performance of the past five years.

The appointment of AlixPartners follows a slew of warnings from other retailers that they will be squeezed by higher taxes and employment costs.

The boss of Marks & Spencer warned that the Government’s Budget policies could shrink the UK’s retail sector, squeeze jobs and slow wage growth.

Meanwhile, NEXT cautioned over slowing sales growth in 2025 and said it would need to hike prices due to the impact of recent Budget measures.

The new Budget includes a higher rate and lower threshold on employer's national insurance contributions, an increase in the national minimum wage, and an increase in the national living wage, all of which are leaving employers more than usually squeezed.

The Government said extra revenues raised from higher taxes on businesses will help fill a gap in the UK’s public finances and be plugged into things like infrastructure and the public sector.