Fenwick has reportedly hired restructuring experts from AlixPartners as the British department store seeks to cut costs amid years of financial losses.

On Monday, The Sunday Times reported that the move might lead to cuts including layoffs and store closures.

The move comes after a 5.2 per cent drop in Fenwick’s sales in 2024 and losses spanning six years.

For the financial year ended January 26, 2024, the chain reported a pre-tax loss of £39.1 million,which the firm attributed to the cost-of-living crisis and changes in the retail environment.

The results follow several strategic steps to boost the company’s finances in recent years, including the sale of its New Bond Street Store to Lazari Investments for around £430 million in December 2022 and investment in digital technologies.

The New Bond Street store sale helped to drive an increase in profits in 2023, with Fenwick recording a £199.7 million turnover compared to £153.7 million in the previous year, as well as sales growth of 51 per cent.

Between 2022 and 2023, the firm continued to strengthen its digital capabilities with further investments to boost online sales capabilities and integrate advanced technologies to streamline operations, with a focus on customer experience, including personalised shopping services and digital interfaces.

Claire Wallis, retail director at management and technology consultancy BearingPoint, told Retail Systems that the restructuring plans reflect a wider cost-cutting trend in the industry, with retailers battling to remain financially sustainable in a challenging economic environment.

“Companies are preparing for upcoming changes like the national living wage and National Insurance impacts by finding ways to absorb these costs, improve operational efficiency and optimise their current business operations” she noted. “In the case of Fenwick, their goal is to either minimise cost increases or dramatically reduce expenses by cutting staff.”

Wallis believes there is currently a polarised approach to business strategy, with companies either playing a “long term game” with strategic, thoughtful planning, or pursuing “quick wins”, and short terms solutions that might not be beneficial in the long run.

“Businesses aren't finding a balanced middle ground,” she said.

Wallis added that retailers are instead either making carefully considered long-term decisions or implementing hasty, potentially short-sighted cost-cutting measures, with the latter potentially detrimental in the current retail environment.

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