Fenwick family takes out £5m dividend despite warning on new cost pressures
The Fenwick family has taken a £4.8m from their department store chain while warning about the pressure government is placing on the retail sector.
According to accounts for the year to the end of January 2016, the company's sales rose by 1.2 per cent in the past year, reaching £431.7m. Pre-tax profits were up by a quarter at £44.2m.
Read more: John Lewis opens flaghip store in Leeds
The business said that the new cost pressures of the national living wage and the hike in business rates in London will be "significant" for the retail industry.
The national living wage came in at the beginning of April this year and the business rate increase in London – a 50 per cent hike for some businesses – will come into effect in April 2017.
Chairman Mark Fenwick said: "Despite better economic headlines in the UK during 2015, the retail sector continues to be extremely challenging.
Read more: Debenhams' boss in the spotlight over pension fund woes
"Digitally empowered customers are driving major structural change in the sector while excess retail capacity is resulting in frequent discounting, price deflation and margin erosion. Total discretionary spend is also reducing and within this, digital and service based experiences are taking an increasing share of disposable income."
The company said it "remained cautious about UK retail prospects" but continues to invest in modernising its stores, with projects finished in Newcastle, Bond Street and Brent Cross over the prior year.
Fenwick plans open a new store in The Lexicon, Bracknell, in 2017 and said it is looking at investment properties in Kingston and Colchester.