Published on September 16th, 2021 | by The GC Team0
John Lewis reduces losses but warns of uncertainty ahead
The John Lewis Partnership (John Lewis and Waitrose) reduced its pre-tax losses to £29 million (incl. exceptional items) for the first half of its financial year, but warned of “significant uncertainty” due to supply chain challenges and labour shortages.
The result was a significant improvement on last year’s loss before tax of £635 million, which was dominated by a write down in the value of John Lewis stores.
Profits in the half-year to 31st July were underpinned by sales of £5.9 billon, a 6% increase on the same period last year.
The John Lewis brand saw strong sales growth in the six months: up 12% on last year (like-for-like up 13%), a rise of 1% on 2019/20 (like-for-like up 11%). Almost 75% of sales were online in the first half, broadly the same as last year but up 40% on pre-pandemic levels.
The Partnership is in the first year of a five-year plan to return the business to sustainable profits of £400m a year.
It closed eight John Lewis stores during the half-year – 16 in total plus several Waitrose stores since the start of the pandemic – and is consulting on the closure of an associated delivery hub. The number of head office roles have been reduced and consultation on plans for fewer managers in John Lewis and Waitrose are in progress.
“Our financial performance in the first half year shows encouraging progress against the Partnership Plan,” said JLP Chairman Sharon White.
Commenting on the second half of the year, in which the business’s profits are skewed because of the Christmas season, particularly in John Lewis, White warned of “significant uncertainty” ahead.
“Like the whole of retail, we are managing global supply chain challenges and labour shortages,” she said, adding that current inflationary pressures are expected to persist.