LONDON — With New Bond Street‘s fortunes on the rise, and department stores struggling in the wake of the pandemic, Fenwick has decided to shutter its historic London site and sell the property to Lazari Investments.
Fenwick confirmed this week that it was selling its site at 57 to 63 New Bond Street, which houses the Fenwick store and office, and an adjacent property at 53 to 55 New Bond Street, currently the Dolce & Gabbana store and office space.
Fenwick opened its Bond Street store in 1891, with the current unit comprised of six composite buildings acquired between 1887 and 1961, and unified in the 1980s.
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The Fenwick family and management said they were making the move to “strengthen the financial foundations for the future and make significant investments in its stores and online for long-term success.”
Although the terms of the deal were not disclosed, industry sources said the property portfolio sold for 430 million pounds.
Lazari Investments said the transaction is set to be completed early next year, and that Fenwick will continue to trade from the store “at least” until 2024.
Fenwick, which is celebrating 140 years in business, said that like the rest of the U.K. retail industry, it has been impacted by “challenging” trading conditions for several years.
“Amid the turbulent economic environment, fresh capital investment is required in order to return the business to profitable growth and cement Fenwick’s position as the U.K.’s leading multichannel premium department store,” it added.
The store said that despite a 71 percent recovery in sales, and a significant reduction in losses for the financial year to January 2022, it was time to say goodbye to the Bond Street store and raise capital for the rest of the business.
Fenwick confirmed that its eight England stores — in Newcastle, Kingston, Brent Cross, Colchester, Canterbury, Bracknell, Tunbridge Wells and York — would remain open, and the online business would continue to expand.
Fenwick is an unusual retailer in the U.K. as it owns the bulk of its property. It said that proceeds from the sale of the New Bond Street units will fund “significant investments” in stores including the Newcastle flagship, which is undergoing refurbishment, and in its growing online business.
The company will also make a “significant contribution” to its pension fund, and repay debt.
Simon Calver, chair of Fenwick, said the deal will enable the business “to continue to serve communities in stores and online for many years to come. The sale has been a difficult decision for the Fenwick family, who are committed to providing the business with the means to thrive for the long term. Their support will enable the next stage of the journey for the Fenwick family business.”
The company’s chief executive officer John Edgar said the capital injection from the Bond Street sale will put Fenwick “in a much stronger position to grow its online business, and concentrate on cementing our position as the home of excellent hospitality and a premium retail edit. After considering a range of different options, it was decided that selling the Bond Street property is the right course of action to set us on the strongest possible footing for the future.”
Fenwick said it plans to open a new central London office for management and colleagues, and will be working to support staff through the transition. It did not mention layoffs in the announcement.
It is certainly a good time to sell.
New Bond Street is the fourth most expensive street globally, and the second most expensive shopping street in Europe, according to a report published by Cushman & Wakefield last month.
The street got a major boost earlier this year from the opening of the Elizabeth Line underground and overground train and was the only U.K. street to feature in Cushman’s global ranking.
The Cushman report described New Bond Street as “by far the most expensive street to locate a shop in the U.K.,” with average prime rents standing at $1,361 per square foot, more than double that of Sloane Street at $607.
Many of the properties on the street are directly owned by the big luxury groups, including Richemont, Kering, LVMH Moët Hennessy Louis Vuitton and Chanel.
Peter Mace, head of Central London Retail at Cushman & Wakefield, said New Bond Street has recovered “exceptionally well” in the last 12 months despite COVID-19 putting the stops on international tourism.
Mace said the street attracts luxury shoppers, “who have proven to be less impacted by previous recessions.” He added that newly favorable exchange rates and “slightly lower” rents may also attract new luxury brands to set up shop on the strip.
As reported, Gucci will be moving from its longtime corner site on Old Bond Street to 144 to 146 New Bond Street.
Gucci‘s new 16,000-square-foot home is owned by Trophaeum Asset Management, which purchased the site in 2020 from a firm controlled by the banker Joseph Safra.
David Silverman, director of Lazari Investments, described the Fenwick properties as “a landmark collection of buildings. We look forward to creating a mixed-use development, adopting the very highest standards of sustainable design.”
According to its 2021 annual accounts, Fenwick saw a 71 percent increase in gross sales to 240 million pounds and a 95 percent improvement in pre-tax losses to 5.2 million pounds for the period ending Jan. 28, 2022.
As reported, over the last nine months Fenwick has taken on 100 new fashion brands including Self-Portrait, Marni and Rosie Assoulin, and added more than 40 niche skin care and fragrance brands, such as D.S. & Durga, Robert Piguet and BDK.
It has also revealed plans to funnel 40 million pounds into its flagship in Newcastle, England, where it has had a presence since 1882.
The architect Ben Mailen is redesigning the store’s exterior and working alongside Sybarite, the London architecture and design firm. Sybarite is creating new atria for the historic building and the renovation of the beauty hall and accessories area.
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