Department store chain Fenwick has named outgoing Co-op boss Richard Pennycook as its new chairman.
Pennycook will be the first non-Fenwick family member to take the role at the 135-year-old retailer.
The privately-owned 11-strong chain had humble beginnings as founder John James Fenwick started the business when he took over a doctor’s house in a residential area of Newcastle upon Tyne.
But how is Fenwick currently placed in the market? Retail Week runs the rule over the department store business.
Flagship store base
Fenwick’s flagship 250,000 sq ft store in Newcastle upon Tyne has a particularly prime position at the heart of a vibrant regional retailing scene.
The Bond Street store in London has also been performing well following an extension and refurbishment under a significantly strengthened management team.
“Fenwick is one of the most profitable department store businesses in the UK”
As a family-owned and run department store group, Fenwick has been able to develop the business outside of the spotlight of the City.
As such, it has made two key acquisitions in the past 15 years – Bentalls in 2001 and Williams & Griffin in 2008.
A strong element of local buying, based on customer demographics of the 11 different stores, helps to control stock levels and has become something of a USP.
Fenwick also customises promotions and events per store.
Fenwick is one of the most profitable department store businesses in the UK and, while profits have been coming under pressure of late, pre-tax margins continue to remain in double figures.
In its last full-year, pre-tax profits hit £44.2m off group sales of £302m.
Bentalls’ acquisition exerted prolonged pressure
The company struggled to digest the Bentalls acquisition, which negatively impacted profitability for five years after its purchase.
With Fenwick retaining only two of Bentalls’ six stores, the £70.8m acquisition of the business may have been a high price to pay for the Kingston-on-Thames flagship.
Some stores struggling
“Fenwick last month revealed plans to close its Leicester store, partly blaming the rise of online shopping”
With renovations and extensions to the major flagships in Newcastle and London having driven growth across these stores in the past few years, it is likely that some of the company’s smaller stores must be struggling.
The retailer indicated that its small like-for-like sales uplift in its 2016/17 financial year was driven by its provincial locations.
However, Fenwick last month revealed plans to close its Leicester store, partly blaming the rise of online shopping.
While no new stores have opened in more than a decade, momentum within the estate has been maintained as a result of a regular refurbishment programme and upgrading of its key stores.
The overhaul of its stores in Bond Street, Brent Cross and Newcastle has helped drive what growth there has been of late.
The Williams & Griffin store in Colchester was relaunched last autumn, bearing the Fenwick name.
The opening of an 80,000 sq ft Fenwick store as an anchor in the 340,000 sq ft Bracknell regeneration programme will also provide a significant boost to the business this year.
Details of the store were first revealed in 2013.
While it is well known for its portfolio of strong brands, the retailer has been investing in own-label development of late, which management will be hoping can drive profit growth.
“Fenwick has continued to invest heavily in its store base”
At the end of 2014, Fenwick strengthened its board with the appointments of Tesco veteran Christine Cross and former Mothercare and Body Shop director Alastair Kerr to non-executive roles.
Planned online launch
The ecommerce success of other department store groups has shown that this could be a lucrative channel for Fenwick if it can come up with a credible offer.
High levels of current investment
Fenwick has continued to invest heavily in its store base, with more than £30m spent on the overhaul of Williams & Griffin in Colchester.
The Bracknell development is likely to swallow up significantly more money.
Lack of online offer
Fenwick remains committed to launching online, but two fairly tentative trials appear to have come to nothing. An online shop will launch “soon”, it said last month.
At the time, chairman Mark Fenwick reportedly said: “Retail has changed a lot, online has become a big factor. We haven’t got an online presence for reasons we can’t discuss, they’d take too long to discuss.”
The retailer’s relatively low profile was always going to make it more difficult for the company to establish an online following, but the delays and apparent about-turns mean that the group is in danger of missing out on one of the department store sector’s few growth opportunities.