Fenwick is swinging the axe on 421 jobs as part of a major cost-cutting drive amid a collapse in annual profits.

The department store chain, which has a significant presence in Colchester High Street, said the cull - part of a turnaround effort - will affect management, support and shop floor staff.

It came as Fenwick posted a 93 per cent fall in pre-tax profits, to £2 million, after being stung by a hefty impairment charge on the value of its properties and costs linked to a restructuring plan.

It is not yet known whether the restructure will affect staff in Colchester.

A spokeswoman for Fenwick said: "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.

"We have also restructured parts of the business and have made the difficult to decision to cut staff numbers across the business, reducing total headcount by 421 to 2,879."

Gross sales also decreased by 3.6 per cent to £411.1 million in the 52 weeks to January 26.

Pre-exceptional operating profit dropped from £14.4 million to £6.5 million.

This year has been torrid for high street retailers, with department stores showing some of the most significant signs of financial distress.

House of Fraser collapsed into administration last month and Debenhams has issued a string of profit warnings.

But Fenwick insisted that its transformation plan is on track.

The firm added: "The fact that sales fell only slightly last year demonstrates the strength of our local brand, and our product and customer service offer.

"As part of our programme we are investing in IT and other back office systems, in our flagship Newcastle store and in a new e-commerce offer, which will go live in early 2019."

As well as Colchester, the retailers has stores in Newcastle, where more than 100 staff have been made redundant, Bond Street, Kingston, and Brent Cross.

Branches in Leicester and Windsor has been closed down.