Department store chain Fenwick is to close its main London shop after selling the building to property developers in a multimillion-pound deal.
The company, first launched on Tyneside in 1882, says it has decided to sell the Bond Street building to strengthen its future foundations. It will use proceeds of the deal to bankroll significant investments in Fenwick stores, including its Newcastle flagship store.
Fenwick has not confirmed the sale price but it is understood the five-story store and an adjoining property on New Bond Street sold off a guide price of £430m. The department store will remain open until the start of 2024.
Fenwick has eight stores across the UK in Newcastle, Kingston, Brent Cross, Colchester, Canterbury, Bracknell, Tunbridge Wells and York alongside its growing online platform.
The London store is the fourth smallest in the portfolio and takes only half as much in sales as the prominent Northumberland Street store in Newcastle. Around 200 people are based there, including 100 function staff who are now set to relocate to a new office. The company said efforts will be made to move the remaining 100 shop floor employees to other locations over the next 14 months.
The move comes two months after Fenwick published its latest accounts, covering the year ended January 28, another challenging time for the business but one in which it narrowed its operating losses to £18.3m, and net sales showed “considerable improvement”, rising 69% to £201.3m.
But amid the turbulent economic environment, it said that fresh capital investment was required in order to return the business to profitable growth. The company will use cash from the property deal to make major investments in stores across the country including the flagship store in Newcastle and its shop at Kingston upon Thames. It will also invest in its growing digital presence in order to become a leading online department store, while contributing a significant sum to its pension fund.
Other plans include repaying debt and firming up a strong balance sheet for the business, which continues to own the majority of its properties. A portion of the proceeds will also be shared with colleagues across the business and the surplus will be returned to shareholders.
