John Lewis confirms stores will shut following first loss
John Lewis: swung to loss
Department store and supermarket group John Lewis Partnership has confirmed that it will be permanently closing some stores.
“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” said chairman Sharon White.
“Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain. We are currently in discussions with landlords and final decisions are expected by the end of March.”
It was previously reported that eight stores will remain closed.
The partnership plunged to a £517 million loss from a £146m profit last time.
The loss was attributed to a substantial exceptional costs of £648m, mainly the write down in the value of John Lewis shops, restructuring and redundancy costs.
Before the pandemic it judged that £6 in every £10 spent online with John Lewis was driven by its shops. The ratio has fallen to £3 in every £10.
It revealed that a benefit of having two businesses was that 4,500 staff from John Lewis were redeployed to Waitrose during the various lockdowns.
Waitrose.com has grown fourfold since February 2020, now taking around 240,000 orders a week, and stands as a £1bn sales business.
Johnlewis.com has grown significantly, up 73%, and this year was three quarters of the brand’s sales, from 40% before the crisis.
A trial partnership with Deliveroo has attracted younger new customers and is available through 40 Waitrose shops.
Thirty new fashion and beauty brands have been launched in store and online, with a further 50 being introduced, many of them independent and British.
“We wish we were in a position to pay a bonus and it has been a very difficult decision not to,” said Ms White (pictured). “The Partnership Board believed that to do so would have held back our ability to protect the business in very difficult times and to lay the foundations to return to sustainable profit.
“We are committed to restarting bonus as soon as our profits (before exceptionals) reach £150m on a sustainable basis and our debt ratio is below 4 times, and to paying the voluntary real living wage when profits rise to £200m.
“We plan to invest £800m in 2021/22 to support our turnaround, approximately 40% higher than recent years. Given this raised level of investment, we expect our financial results – including liquidity, debt ratio, and profit before exceptionals – to worsen in 2021/22 and then improve in later years.”