Department store chain Fenwick has made 408 job cuts – equivalent of 12 per cent of its work force – as part of a mission to cut costs by centralising its back office functions.
The 133-year old retailer placed a large number of its 3,200 staff into consultation earlier this year after it revealed plans to run its nine autonomous stores as one group with streamlined buying, HR, marketing and IT functions.
The majority of the outgoing staff – mostly in support and management roles – took voluntary redundancy while around 135 others were given compulsory redundancy.
Fenwick, founded in 1882, was a family run department store chain until the end of 2017
News of the job cuts came as the Newcastle-based firm posted an eye-watering 93.4 per cent slump in full-year profits to just £2million.
Before exceptional items, Fenwick generated profits of £6.4million, compared with £14.3million the previous year.
The retailer, which does not yet have a transactional website but plans to launch one in the coming months, blamed the closure of its Leicester and Windsor stores for a 3.6 per cent decline in total sales.
The two remaining members of the Fenwick family parted ways with the firm at the end of last year and ushered in new boss Robbie Feather from Argos, who formally took the helm in January.
Today Feather told Retail Week: ‘Colleagues and the shareholders recognise that we need to change. The last six months, a big chunk of it has been absorbed by that change agenda.
Fenwick currently has nine stores, including one in London’s Bond Street
‘We said goodbye to many of those colleagues last Friday, so September 1 is an important date for us. We go live with our new functional-led structure this week and we are embarking on the next period of our change programme. That will increasingly focus on the customer proposition around product, service and services.’
Feather emphasised that Fenwick, which was founded in 1882, has to ’embrace the changes’ in the challenged retail sector, but warned that the cost of the transformation was likely to eat into profits again this year.
He said: ‘We know the market is tough, but we are also actively pulling away from aggressive discounting. It will be another tough year, but it is what we have budgeted and what we expect.’
Fenwick is one in a long line of retailer to make job cuts as 2018 continues to a testing year on the High Street.
Some firms are struggling to keep their heads above water as a lethal cocktail of rising costs, falling footfall and the shift to online sweeps through the industry.
So far this year, Maplin, Toys R Us and Poundworld have collapsed into administration, while Carpetright, New Look and Homebase are urgently closing stores to cut property costs.