CashNews.co
By James Davey
LONDON (Reuters) -British retailer the John Lewis Partnership reported a 91% reduction in first-half losses and said it was on track to deliver “significantly higher” full-year profit as its turnaround plan gathers pace.
Its department store division in particular has had a difficult few years as it battled first the COVID pandemic and then the cost of living crisis. It closed stores and cut jobs.
But the partnership, which also runs the upmarket Waitrose supermarket chain, is now beginning to benefit from the turnaround plan launched by outgoing chair Sharon White in 2020 that sought to boost the appeal of its brands and invest in technology in addition to cost cuts.
“As customers told me recently at a shop, the buzz is back at the John Lewis Partnership,” CEO Nish Kankiwala told reporters on Thursday.
Former Tesco executive Jason Tarry will succeed White as chairman of Britain’s largest employee-owned business on Monday, and is tasked with driving the next phase of its modernisation.
This week, the department store division re-launched its 100-year old “Never Knowingly Undersold” pledge to customers, two years after dropping it, hoping a revamped version of the price guarantee will help drive growth.
Department stores boss Peter Ruis said its supply chain was in its best shape for years.
The partnership made a loss before tax and one-off items of 5 million pounds ($6.5 million) in the six months to July 27, compared with a loss of 57 million pounds in the same period last year. Total revenue rose 2% to 5.2 billion pounds.
The group often makes a first half loss as most of its profit is made in the run-up to Christmas.
The first-half performance reflected improved trading at Waitrose, where sales increased 5%, but more subdued trading at department stores, where sales fell 3%, hurt by the division’s exposure to more discretionary items in a “challenging” market.
The partnership said it attracted half a million new customers in the first half to reach 23.1 million. It expects to invest 500 million pounds this year.
“These results confirm that our transformation plan is working,” said Kankiwala.
“We’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.”
In its 2023/24 year, the partnership made an underlying pretax profit of 42 million pounds. Independent retail analyst Nick Bubb pencilled in 125 million pounds for 2024/25.
($1 = 0.7661 pounds)
(Reporting by James Davey; editing by Elizabeth Piper, Mark Potter and Tomasz Janowski)