Yahoo Finance John Lewis could axe staff bonus for first time since 1953
John Lewis Partnership on Thursday warned that full-year profits would be “significantly lower” than the previous 12 months, and said it was considering axing its staff bonus for the first time since 1953.
The company also said that Paula Nikolds, who serves as managing director of the John Lewis & Partners division, would unexpectedly step down in February before the merger of the John Lewis and Waitrose executive teams.
Nikolds had been expected to take over as executive director of the combined brands.
Gross sales at John Lewis stores fell by 2.3% to £1.1bn in the seven weeks to 4 January, while those at Waitrose stores fell by 1.3%.
The company said it was “encouraging”, however, that online orders at Waitrose, which have been an area of focus for the company, climbed 23.4% in the week before Christmas.
In a trading statement, chairman Charlie Mayfield said: “After some reflection on the responsibilities of her proposed new role, we have decided together that the implementation of the future partnership structure in February is the right time for her to move on.”
Nikolds has been managing director of John Lewis & Partners since 2017, and joined the company as a graduate trainee in 1994.
Mayfield is also stepping down as chairman. Underlying profits in the full year to 4 January would be significantly lower, the partnership said, even after profit crashed by 45% in the previous year.
The partnership’s board will meet in February to decide whether it is “prudent” to pay a bonus to employees, who are all partners in the company.
The decision, the company said, will be influenced by profitability, planned investment, and the strength of its balance sheet.
A spokesperson for John Lewis Partnership said on Thursday that there have been 17 years in total since the company was founded in 1919 that a bonus was not paid to partners.
Many of those years fell during the second world war, but the last time the company axed the bonus was in 1953.
The company had warned last year, however, that it might also have to suspend its bonus. But it instead paid the lowest bonus in more than 50 years to partners.
John Lewis in October announced a major cost-cutting plan, and said that it would shed about a third of management roles in an attempt to reduce outlays by £100m.
It also said that it would ask some of its landlords for discounts.
