John Lewis has warned of further store closures as the Partnership recorded a pre-tax loss of £517 million for the year to 30 January 2021, compared to profits of £146 million the previous year.
The company said this was a result of severe COVID trading restrictions and substantial exceptional costs of £648m due to the “pronounced shift to online” and the subsequent write down in the value of John Lewis shops during the crisis.
“Before the pandemic we judged that £6 in every £10 spent online with John Lewis was driven by our shops. The ratio has fallen to £3 in every £10,” the retailer said.
The Partnership revealed it does not expect all its John Lewis branches to reopen at the end of lockdown and it is currently in discussions with landlords; he could hear on any final decisions by the end of the month.
None of the current 42 John Lewis locations were pin-pointed, but this comes after…
Chairman, Sharon White, said: “Retail is changing fast around us. We are going through the greatest scale of change in the Partnership’s 156-year history. As spending shifts online we want to ensure our stores reflect how customers want to shop.”
Ms White added that an £800m investment will support the company’s turnaround in the coming year. Part of this includes the Partnership’s five-year plan and a reshape of its store estate.
There will be a mix of destination stores and smaller, local service stores “with the very best of John Lewis”, a trial of John Lewis shopping areas in Waitrose stores, as well as improvements to its click and collect service in Waitrose branches and third party stores like the Co-op.
Returning to its unaudited results for the year, the Partnership reported profit before exceptionals of £131m, up £61m on the previous year, thanks in part to Government support in the form of business rates relief and furlough support. It expects to continue accepting the business rates relief from April to June. “We are not out of the crisis yet and the economic environment remains extremely uncertain,” said Ms White.
John Lewis saw profit before tax of £554m in 2020-21, a drop of £180m from 2019, while online the retailer’s sales grew by 73 per cent.
Looking ahead, Ms White continued: “The outlook is uniquely uncertain as the country charts its exit from lockdown, with non-essential retail in England due to open on 12 April at the earliest; and the timetable varying in Scotland and Wales. No one has a crystal ball to predict the strength and pace of the recovery – or the future course of the virus.”