Fenwick is to axe more than 400 jobs after its pre-tax profits nose-dived.
The department chain announced that profit fell by 93.4% to £2m for the year to 26 January 2018 from more than £30.4m on the back of £411m in gross sales, down from £426m in 2016/17. Net operating profit stood at £6.4m, down from £14.4m the previous year,
Like-for-like sales dropped by 2.6%, and margins fell by 8% year on year.
Fenwick said “challenging market conditions” on the high street caused the fall in profits, and the headcount will be cut by 408 to 2,879. The department chain announced in April that it was seeking to cut roles as part of a modernisation plan.
Fenwick said in a statement: “Our annual results reflect the challenging market conditions all department store groups are facing, including increased competition from online retail, declining footfall on the high street, and increasingly competitive price discounting – factors that have been exacerbated by a rise in the cost of living that has led to a fall in consumers’ disposable income.
“The fact that sales fell only slightly last year demonstrates the strength of our local brand, and our product and customer service offer.
“The transformation programme we announced last year is progressing to plan and we believe it will put Fenwick on a strong footing for future growth. As part of our programme we are investing in IT and other back-office systems, in our flagship Newcastle store and in a new ecommerce offer, which will go live in early 2019.
“We have also restructured parts of the business and have made the difficult to decision to cut staff numbers across the business.”