Fenwick is bringing in restructuring experts to help turnaround flagging sales, according to reports.
The department store chain, which has eight locations across the country and stocks beauty brands such as Charlotte Tilbury, Estée Lauder and Jo Malone London, has reported losses for the past six years.
The family-owned business is working with AlixPartners on plans to slash costs, The Times reports.
“Like all retailers at the moment, we are keeping a close eye on our costs, especially in light of the tax and minimum wage increases in last October’s budget,” a Fenwick spokesperson told the publication.
Sales fell 5.2% to £299m in the year to January 2024, the most recently published financial accounts for the retailer reveal. Pre-tax losses were £38.1m.
The department store closed its flagship London store on New Bond Street last year after 130 years.
It used the reported £430m from the sale to support the business, including repaying debt, paying a dividend to family members and investing in stores and online, according to The Times.
Newcastle has become its main store, and is where it opened a 26,000sqft beauty hall in October.
Said to be the UK’s biggest outside of London, it has a 50ft fragrance bar and stocks 163 brands.
At the time Fenwick said the “reimagined” beauty hall, which took three years to renovate, “demonstrates the continual evolution of the Fenwick in-store customer experience” with innovative new products and brands and expert beauty services.
Retailers in the UK have faced a tough time in recent years with the Covid pandemic closing stores and the ongoing cost of living crisis hitting consumer spending.
Rising costs such as rents and energy bills have also hit the high street hard.
Businesses face another blow after the government revealed plans in last year’s Budget to increase the rates of National Insurance paid by employers and hike the minimum wage.
This is expected to add to the costs of many retailers from April when the changes come in.
Fenwick is not the only UK department store looking to beauty to revive its fortunes.
John Lewis completed a multi-million pound overhaul of its stores last year, installing bigger and better beauty halls at sites in Oxford Street, HIgh Wycome and Cheadle.
At the time, Helen Spencer, Head of Beauty, said the segment accounts for 62% of sales in its physical stores, with online beauty sales amounting to 38%.
Last week, the department store reported a 73% rise in annual profits for the year to January, up from £56m the previous year to £97m.
But it said it would not pay out a bonus to staff for the third year in a row as there was more to do to turn things around after several years of struggles which involved store closures and job losses.