Yahoo Finance John Lewis bounces back to profit but no bonus for workers again
The owner of John Lewis and Waitrose has returned to annual profit but will not pay its workers a bonus for the second year in a row.
The John Lewis Partnership (JLP) said it made a £56m pre-tax profit in the year to 27 January, compared with a £234m loss in the previous year.
The staff-owned retailer, which employs about 74,000 people – known as “partners” – said that after “careful consideration” it would not pay its staff an annual bonus for the third time in four years. It said that instead, “at this point in our transformation, [a sustainable business] is best served by investing in our retail businesses and in partners’ base pay.”
It plans to refurbish 80 Waitrose stores and open new supermarkets in some areas while investing in technology to improve the John Lewis website and customer service for shoppers in stores.
The company said it was “entering a year of significant investment” with £542m planned to be spent – up 70% on a year before.
The investment will also go towards “simplifying the way we work”, suggesting job cuts may be on the cards this year. The group is thought to be considering cutting up to 11,000 jobs over the next five years.
Sharon White, the JLP chair, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and ourpartners’ commitment to delivering excellent customer service.
“This year we will unashamedly focus on investing back into our retail businesses for our customers.”
She said the return to profit came after making £88m of savings, mainly by better matching staff hours to need in Waitrose shops and also by cutting energy use and more automation in the John Lewis distribution network.
Sales, excluding VAT, rose by 2% to £10.8bn. At Waitrose supermarkets, sales rose by 5%.
However, sales at the John Lewis department stores fell by 4% to £4.8bn, despite inflation of more than 5% last year. The company said it had recorded weak sales of homeware and tech but sales of fashion, including beauty products, were up.
Beauty sales were up by 4% on strong sellers such as men’s tailoring – up by 48% – and lingerie, up by 8%.
