John Lewis Partnership returns to profit but will not pay bonus
The John Lewis Partnership has returned to annual profit and announced that it will be investing significantly in the business as part of its refreshed plan.
The partnership attributed the improved performance to a combination of sales growth, gross margin rate improvement and sustainable productivity improvements.
In the year to 27 January, pre-tax profit came in at £56 million compared to a £234 million loss in the prior year. Partnership sales grew by 1% to £12.4 billion from a year earlier, while total revenue edged up 2% to £10.8 billion.
Sales at the partnership’s Waitrose supermarket climbed by 5% to £7.7 billion in the year after it attracted a record number of customers who responded well to its New Lower Prices campaign.
Meanwhile, sales at John Lewis fell by 4% to £4.8 billion in what the partnership described as a challenging year for the department store sector. While sales in fashion, including beauty, were up year-on-year, sales in the home and technology categories were weaker.
Despite the return to profit, the John Lewis Partnership will not be paying a partner bonus this year as it focuses instead on investing in partner pay and improving its business.
The partnership said its refreshed plan means it is now “laser focused on providing a brilliant retail experience” and improving productivity. This will be helped by a significant investment of £542 million in modernising technology, refreshing shops and simplifying ways of working.
Sharon White, chairman of the John Lewis Partnership, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and our partners’ commitment to delivering excellent customer service.”
“This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our partners.”
