UK department stores operator Fenwick has reported a slight uptick in sales but surging pre-tax profits in the year to January 29 2016. The retailer also said its controlling family had been paid a £4.8m dividend for last year but warned about the health of the UK retail market.
The 134-year-old company said sales rose 1.2% to £437.1m in the 12-month period while pre-tax profits grew by a quarter to £44.2m. It said it saw an encouraging like-for-like sales hike but it remains “cautious about UK retail prospects.”
Chairman Mark Fenwick said the UK economy may have been strong in 2015 but retail was “extremely challenging”.
He said “digitally empowered consumers” are driving transformational changes in the retail sector while frequent discounts are undermining margins and causing price deflation.
He added that consumer discretionary spend is falling and a large chunk of what remains is being spent on “digital and service based experiences” rather than the fashion product in which Fenwick specialises.
The company also said that the national living wage and business rate rises in London ahead will add to cost pressures on retailers.
Fenwick has only 11 stores, including its flagship on New Bond Street in London, and plans to open a new store in Bracknell in 2017.
Unlike many firms with a small store estate, Fenwick is not currently maximising its sales via e-commerce as its website is currently an information-only location. The retailer plans to relaunch into e-commerce later this year.