Published on October 16th, 2020 | by The GC Team0
John Lewis targets £400 million profit by 2025
The John Lewis Partnership today said it is aiming to see profits reach £200m in the next two years and £400m by 2025, backed by a renewed focus on service and cost savings with a Partnership Plan which builds on “strong momentum in a tough year”.
The company is committing £1bn over five years to accelerate its online business and transform shops to make it easier for customers to shop on its websites and apps and provide more convenient delivery options.
“We’re modernising Waitrose and John Lewis shops so we have the right space in the right place,” it stated.
JLP said it aims to save £300m per year by 2022, making operations and head offices simpler and more efficient – savings crucial to free up money to invest and deliver the plan.
While both brands will work much more closely together in-store and online, John Lewis will become more accessible locally in different formats, building on significant expansion in Click & Collect, which will soon reach 1,000 locations through shops and collection points. As shopping habits continue to evolve, the business expects to become a 60-70% online retailer by 2025.
The Partnership announced it is also investing in data analytics and loyalty plans to reward and develop deeper relationships with customers. Its Never Knowingly Undersold promise will remain in place for now, with a new value pledge replacing it next year.
JLP Chairman Sharon White said: “We’ve seen five years of change in the past five months and Waitrose and John Lewis have responded with great agility. Our plan means the John Lewis Partnership will thrive for the next century, as it has the last.”
Included in the five-year plan is the retailer’s ambition to be more sustainable and more ethical, such as commiting to net zero carbon by 2035; all John Lewis product categories having a ‘buy back’ or ‘take back’ solution by 2025; recruiting people from the Care sector; and a commitment to pay Partners the voluntary Real Living Wage when the business reaches over £200m profit. The company also aims to pay a bonus when profits exceed £150m and its debt ratio falls below 4 times.
“Inspirational new services” to help JLP reach its goal will be backed by £400m to allow the firm to grow in new areas from which it is aiming to achieve 40% of its profits by 2030. These include areas such as rental, recycling, savings, insurance and private rented and social housing.
Nina Bhatia, Executive Director of Strategy & Commercial Development at JLP, said: “This is a bold plan to grow our business and get us much closer to our customers.
“We’re creating new inspirational services for customers where strong ethical values and peace of mind matter, like reusing and recycling products, personal savings and rented housing.
“Our plans will firmly establish Waitrose and John Lewis as the go-to brands for customers that care about quality, value, and sustainability.”