John Lewis transformation delayed, but losses cut
John Lewis has extended its planned transformation by two years as a result of inflationary pressures and greater than expected investment requirements.
Chairwoman Dame Sharon White said there “reasons for optimism” after losses at the partnership in the first half to the end of July narrowed to £54.5m, an 18% improvement on the £66.8m loss in the same period last year.
The loss before tax after exceptional items was £56.2m, compared with a loss before tax of £99.2m in the prior half year, a 43% improvement.
However, it will take a further two years to deliver the Partnership Plan, with a new target of 2027/28 rather than 2025/26 and there will be an additional £600m of efficiency savings, with £308m already achieved through to March this year.
There was a £22.8m increase in costs of running the estate compared with last year, principally driven by inflation in utility costs.
Total group sales were £5.8bn in the half, up 2% year-on-year, with Waitrose up 4% and John Lewis down 2%.
Customers continued to spend on themselves: fashion was up 3% and beauty was up 2% – partly driven by 50 new brands including JoJo Maman Bébé and Le Specs. The second half will see further launches including Vivere, an exclusive with Savannah Miller. Home and tech sales were down 5% and 4% respectively.
The balance between store and online purchases remained broadly unchanged: at 43% and 57% respectively. Shop sales improved by 2% driven by increased footfall while online declined 4% owing to weaker conversion.
Customers were drawn to shops for personal styling appointments (up 27%), beauty services (up 23%) and nursery consultations (up 17%).
Waitrose is responding to the slow down in dining out with ten new ‘dining in’ deals, leading to a tripling in sales.
Dame Sharon said: “The partnership is a unique model that has been tested and come through stronger many times in our 100-year history.
“While change is never easy – and there is a long road ahead – there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the partnership model remain high.”
Nish Kankiwala, chief executive, said: “Our transformation to modernise our business is well under way.”