Family-owned department store group Fenwick has announced that it has entered into an agreement to sell its store and adjoining property on New Bond Street in central London in order to strengthen financial foundations for the future and make significant investments in its stores and online for long-term success.
The property will be sold to Lazari Investments with an expected completion of the transaction early next year. However, Fenwick will continue to trade from the store until 2024.
Fenwick, like the rest of the retail industry, has been impacted by challenging trading conditions for several years. The company has remained resilient due to a number of swift adaptations made in response to COVID-19 lockdown measures – and saw a 71% recovery in sales and a significant reduction in losses for the financial year to January 2022.
However, amid the turbulent economic environment, fresh capital investment is required in order to return the business to profitable growth and cement Fenwick’s position as the UK’s leading multi-channel premium department store.
The proceeds from this sale will provide the capital to invest significantly for the future. This will include:
- Making major investments in stores across the country, including the flagship Newcastle and Kingston. Fenwick has already announced a major investment programme in its Newcastle store and recently revealed a new central atrium which has transformed the shopper experience.
- Investing in its strong and growing digital presence in order to become a leading online department store.
- Contributing a significant sum to the pension fund.
- Repaying debt and further securing its financial position as a business with a strong balance sheet which continues to own the majority of its properties.
- A portion of the proceeds will be shared with colleagues across the business.
- The surplus will be returned to shareholders.
Simon Calver, Chair of Fenwick, says: “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.”
John Edgar, Fenwick CEO, says: “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.”
Fenwick will open a new central London office for management and functional colleagues and will be working to support all colleagues through this transition.
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.”