LONDON, Sept 12 (Askume) – British retailer John Lewis Partnership reported a 91% drop in first-half losses and said it expected full-year profits to “increase significantly” as its turnaround programme accelerates.
The last few years have been particularly tough for its department store unit as it grappled first with the coronavirus pandemic and then with the cost-of-living crisis. It closed stores and furloughed workers.
But the partnership, which also runs the upmarket Waitrose supermarket chain, is now starting to benefit from a turnaround plan launched in 2020 by outgoing chairman Sharon White, aimed at boosting its brand appeal while cutting costs and investing in technology.
Chief Executive Nish Kankiwala told reporters on Thursday: “As customers told me in a store recently, the John Lewis partnership is back in the news.”
Former Tesco executive Jason Terry will replace White as chairman of Britain’s largest employee-owned company on Monday and lead the next phase of its modernisation drive.
This week, the department store division asked customers for a discount after two yearsreiterated its 100th anniversary promise to “never knowingly underprice merchandise.”
Department store executive Peter Ruis said his supply chain is in the best shape it has been in years.
The partnership lost 5 million pounds ($6.5 million) before tax and one-off items in the six months to July 27, compared with a loss of 57 million pounds a year earlier. Total revenue rose 2% to £5.2 billion.
The group often loses money in the first half of the year as most of its profits are made before Christmas.
The first half results reflect improved trading at Waitrose, with sales rising 5%, but weaker trading at department stores, with sales falling 3%, with the more discretionary market remaining “challenging” and impacted by risks across all sectors.
Partners said it attracted 500,000 new customers in the first half, taking the number to 23.1 million. It expects to invest £500 million this year.
“These results confirm that our transformation plan is working,” Kankiwala said.
“We are well prepared for an aggressive peak trading period and remain committed to significantly improving our full-year results.”
In 2023/24, the partnership’s underlying pre-tax profit was £42 million. Independent retail analyst Nick Bubb estimates sales of £125 million in 2024/25.
($1 = 0.7661 British pounds)
