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John Lewis Partnership posts first half profit

By Prachi Singh

16 Sep 2021

Business

Image: John Lewis Partnership

A year into the company’s five-year ‘Partnership Plan’ to return the business to sustainable profit of 400 million pounds a year, John Lewis Partnership reported first half profit before exceptional items of 69 million pounds, which was 124 million pounds up on 2020/21, when the company made a loss of 55 million pounds. The company’s sales for the period improved 6 percent to 5,874 million pounds.

Compared to the first half of 2019/20 when the company made a loss of 52 million pounds, profit was up 121 million pounds.

The Partnership made a loss before tax of 29 million pounds, an improvement on last year’s loss before tax of 635 million pounds. This year is down on the first half of 2019/20 when profit before tax was 192 million pounds.

John Lewis Partnership undertakes cost-cutting measures

As part of the company’s cost-cutting plan, the Partnership closed eight John Lewis stores and are consulting on the closure of an associated delivery hub. The number of head office roles have been reduced and the company is consulting on plans to have fewer managers in John Lewis and Waitrose.

“Our financial performance in the first half year shows encouraging progress against the Partnership Plan. Cost reduction is a key priority and we made savings of 66 million pounds in the first half. The conditions for paying a bonus to Partners - sustainable profits of 150 million pounds and net debts of less than four times our earnings - were set by the board in September 2020 and remain in place,” said Sharon White, chairman of the John Lewis Partnership.

John Lewis sales increase 12 percent

For the first half, John Lewis sales were up 12 percent on last year with like-for-like sales up 13 percent. This performance was slightly up by 1 percent on 2019/20. Almost 75 percent of sales were online in the first half, broadly the same as last year, and 40 percent up on pre-pandemic levels.

The company said technology sales were flat year on year while growth was 23 percent in home, 22 percent in fashion and 18 percent in nursery.

In home category, the company launched Anyday, a new brand that combines John Lewis’ long admired quality with style and value for money. John Lewis plans to introduce 90 new fashion and beauty brands, and invested significantly in nursery with the launch of its own brand travel range and launch of post-birth consultations.