London non-essential says Fenwick CEO, focuses on cities where it can be number one

By

Sandra Halliday

Published
May 4, 2023

The boss of department store chain Fenwick seems to have no regrets about the company’s plan to exit its London store on New Bond Street and any expansion it contemplates will happen outside of London with the chief executive saying that the department store sector has fundamentally changed in recent years.

In an interview with The Telegraph, John Edgar, who took the helm of the family-owned retailer just a few weeks after the first lockdown began in 2020, has been working hard to return the company to profit.

Things are heading in the right direction with losses halving in the latest financial year to £18 million.

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But he thinks it could be some time before economic environment is more buoyant for retailers. Against that backdrop, he criticised some brands for aggressive price rises and said the retailer is talking to them about trying to bring the price of certain products lower.

“Some brands have been more aggressive than others…. We had a conversation this week about repricing some things down,” he said. However, he added that prices are likely to stay elevated for some time as costs remain high.

But he added that not everything is about price: “You have to ask yourself what the role of a department store is. If you’re just a big space with nondescript products, then that’s probably not enough to make people want to go there. A department store has to be different – different in terms of environment and different in terms of products and service.

He said Fenwick sees itself as trying to do something different, more along the lines of Harrods and Selfridges (he previously worked at both as CFO) than its mid-market peers. And while he doesn’t see the luxury model as easy to replicate, he added that “it’s a successful model you see elsewhere and it’s not rocket science”.

He’s planning to invest in revamping Fenwick stores and the sale of the London site on New Bond Street for a rumoured price of more than £400 million is set to help it with this.

The money will help Fenwick toward its goal of generating 20% of its sales online after the firm was late to start e-commerce ops.

Edgar also told the Telegraph that the sale “puts the business in a fundamentally different place to where we otherwise would have been. Compared to other retailers, we have no debt, [and] we have resolved our pension situation.”

He doesn’t seem to too worried about not being in London, especially in the light of the end of VAT-free shopping for tourists. “I could be the richest man in the world, but if I’m in Paris and I can get something 20% cheaper there than I can in the UK, then I’ll buy it in Paris,” he said.

Shutting the New Bond Street store – which is only its fourth largest across its chain – also makes sense given the intense competition in London.

“There’s a lot of retail in central London,” he said. “Our model is that we want to be the only show in town. You can get things with [our stores] that, largely, you can’t get anywhere else in that location.” 

Its overall flagship is in Newcastle where it focuses on offering something different, and plenty of exclusives.

Having closed a number of underperforming stores in recent years, the CEO said there are still cities that he would like to have a branch in, although the fact that there's already a department store, there would stop the company from trying to open in those cities.

He believes the days when a city could support more than one department store are long gone and the market outside of London has changed to the extent that it can no longer support multiple department stores. But if a particular retailer pulled out of a certain city market “where we could see an opportunity, I think we’d really seriously consider it”.

The company is actively seeking new locations, although no opening announcements, are on the horizon. It favours a model of owning most of it properties and given that any new locations it signs up for are unlikely to be wholly owned by the business, it would “have to take it on very carefully”.

And the sale of the London branch doesn't mean that the company would dive deep into the sale and leaseback model of which hae’s never been a fan. He told the newspaper that “other people have done sale and leasebacks and they don’t exist anymore. The money goes pretty quickly”.