John Lewis Partnership reports slump in profits amid 'challenging times'
The John Lewis Partnership has posted a slump in profits after struggling against “challenging times”.
The six months to 28 July saw its pre-tax profit before exceptional items decline by 98.8% to £1.2 million year-on-year.
Meanwhile, gross sales rose by 1.6% to nearly £5.5 billion in the period.
The company said margins at its John Lewis department store chain had had been squeezed in what it described as the most promotional market in almost a decade.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: "These are challenging times in retail. Our profits before exceptionals are in line with what we said they would be at our strategy update in June.
“We're continuing to improve our offer for customers while ensuring we have the financial strength to continue developing our business going forward. This is reflected in both brands continuing to grow sales and customer numbers, and our total net debts reducing.”
Looking ahead to the outcome of the full year, the company said uncertainty about the economy, which was due in part to the ongoing Brexit negotiations, made forecasting particularly difficult. However, it expects group profits to be substantially lower than last year, with profit growth in Waitrose offset by continuing margin pressures at the John Lewis department store chain.
Mayfield added: “We are continuing with our plans for the future in this half and have great confidence in the attractiveness and potential of our offer across Waitrose & Partners and John Lewis & Partners as we approach the final quarter.”
Earlier this month, the company announced that it had rebranded John Lewis and Waitrose as John Lewis & Partners and Waitrose & Partners respectively as a means of highlighting its Partnership business model and culture.
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