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John Lewis PLC on Thursday said the five-year ‘transformation’ plan launched by the UK retailer in 2020 will take two years longer than planned, despite posting a narrowed half-year loss.
The London-based company, which operates John Lewis department stores and Waitrose supermarkets, said its pretax loss narrowed to £56.2 million for the six months that ended July 29 from £99.2 million a year before.
Sales totalled £5.8 billion in the recent half-year, up 2% from a year before, while revenue was up 3%.
At Waitrose, sales rose by 4% annually to £3.7 billion, but this was entirely due to price increases. Average item price was up 9%, while volume was down 5%.
At John Lewis, sales were £2.1 billion, down 2% on a year before. Fashion and beauty sales were up 3% and 2%, respectively, but customers were more cautious about buying ‘big ticket items’. Home and Tech sales were down 5% and 4%, respectively.
Store sales accounted for 43% of the total and online 57%, broadly unchanged, John Lewis said. Shop sales were up 2%, while online was down 4%.
John Lewis said the ’Partnership Plan’ it launched in 2020, with the target of a £400 million profit by financial 2026, is now going to take until financial 2028 due to ‘inflationary pressures’.
It added that investment into its strategy and customers is going to ‘take precedence’ over its annual bonus for staff members.
Chair Sharon White told the PA news agency that workers will need to take the ‘mindset of owners’ as the group continues efforts to improve its finances.
‘Our partners are the centre of the partnership and can hopefully see that right decisions are being made,’ she said.
‘They have to take the mindset of owners here. If the roof of your house needs mending, everyone there would work together to get it fixed.
‘We are doing all we can and we will see what position we are in come March.’
At the start of this year, the employee-owned group said it would not hand staff a bonus for only the second time since 1953 after falling to a hefty annual loss in the previous financial year.
White stressed to PA that the company’s performance over the year ‘picks up’ more strongly over the second half, which includes the Christmas sales period, after being asked whether the latest results pointed towards another annual loss.
In its statement on Thursday, John Lewis said it expects an ‘improved full year financial performance’ compared to the £68.9 million loss before tax, Partnership Bonus and exceptional items that it recorded last year.
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