Published on March 7th, 2019 | by The GC Team0
Bonus cut at John Lewis as non-food profits tumble
The John Lewis Partnership today announced the lowest staff bonus since the 1950s as profits finished substantially lower in what Chairman Sir Charlie Mayfield called a “challenging” year, particularly in non-food.
Partnership management and staff received a 3% bonus after profits fell 45% to £160 million for the year ended 26 January 2019.
Operating profit recovered strongly in Waitrose & Partners, up 18% (to £203.2m), mainly due to improved gross margins. However, it fell sharply, by 56% (to £114.7m), in John Lewis & Partners because of weaker Home sales, gross margin pressure, higher IT costs, the property impact of new shops and lower profit on asset sales.
Sales at John Lewis & Partners were up 0.7%, but down 1.4% on a like-for-like basis. The strongest growth came in areas where the company made the greatest investments in new product and services, including the expansion of its own-brand electricals range, which resulted in sales up 11.2%.
Sir Charlie Mayfield said: “We expect 2019 trading conditions to remain challenging but are confident in our strategic direction and customer offer across both brands.”