The John Lewis Partnership has revealed sharply narrowed half-year losses and mentioned annual income could be “considerably” greater as its overhaul begins to bear fruit.
The worker-owned group, which runs the division retailer chain and Waitrose grocery store arm, reported pre-tax losses of £30 million for the six months to 27 July, down 49% on the £59 million reported a yr earlier.
The John Lewis division retailer enterprise noticed half-year gross sales fall 3% to £2 billion, however Waitrose notched up 5% gross sales development as common costs rose simply over 2%.
Its losses have been additionally boosted as the corporate stripped out £78 million in prices, revealing that 300 jobs throughout the group have been axed within the first half.
The group mentioned whereas the buyer and financial backdrop was “unsure”, it was assured of a marked enchancment in underlying income on the full-year stage.
However it gave no indication over whether or not it will reinstate its annual workers bonus, which has not been handed out for 2 years working.
Nish Kankiwala, Chief Government of the John Lewis Partnership, confirmed the group would decide on the workers bonus in March subsequent yr.
John Lewis mentioned: “We’ve traditionally delivered the vast majority of our income within the second half of the yr.
“Regardless of the atmosphere for our clients remaining unsure, we count on to take care of monetary momentum from constant supply of our multi-year transformation.
“Because of this, we’re assured that full-year pre-exceptional income ought to be considerably above the £42 million we reported in 2023-24.”
Kankiwala mentioned the “buzz is again at John Lewis”.
“These outcomes affirm that our transformation plan is working and we count on income to develop considerably for the total yr, a marked enchancment from the place we have been two years in the past,” he added.
The corporate has been main an overhaul to strip out prices, revealing in August that it was slicing 153 jobs on the division retailer enterprise as a part of a shake-up of its retailer groups to enhance customer support.
The agency mentioned greater than half of the 300 roles total which were reduce have been by voluntary redundancies.
Kankiwala mentioned the group was not planning main job cuts over the second half of the yr, however was persevering with to pare again its workforce, largely by workers attrition – not changing some staff once they depart.
He mentioned: “We’ve been very clear that as we undergo this transformation there might be fewer roles within the partnership.
“On the entire we’re managing headcount by (workers) attrition and redeployment.”
This week, John Lewis introduced again its “By no means Knowingly Undersold” worth pledge in a serious U-turn after ditching the dedication two years in the past over considerations it was much less related to customers.
The partnership can also be opening greater than one other 100 comfort shops over the subsequent three or 4 years as a part of plans to take a position £500 million over 2024-25, up 53% year-on-year.
Kankiwala mentioned shopper spending was sturdy in its Waitrose chain and throughout magnificence, expertise and residential equipment, however stays beneath strain for giant purchases.
“It’s truthful to say that enormous residence objects are impacted by cost-of-living sentiment,” he mentioned.
The outcomes come as former Tesco UK boss Jason Tarry prepares to hitch the partnership subsequent week forward of taking up as the subsequent Chairman, changing Dame Sharon White, who is because of depart on the finish of the yr.
Learn TheIndustry.style’s function on why John Lewis is bringing again its By no means Knowingly Undersold pledge and the way will it work?
