Profits down at John Lewis

Profits at the John Lewis Partnership were “substantially lower” in 2018, with gross sales up by one per cent but profits down by 45 per cent to £160 million.

Sir Charlie Mayfield, Chairman of the John Lewis Partnership, said that it was “a challenging year, particularly in non-food” and that operating profit was fell “sharply” by 56 per cent (to £114.7m), in John Lewis & Partners because of “weaker Home sales”.

However, while Partnership profits were down for the year ending 26 January 2019, performance was up in several other areas and the strongest sales growth was in areas where the greatest investments had been made.

The expansion of its own-brand electricals range resulted in sales up by 11.2 per cent.

Mr Mayfield continued: “The market continues to be challenging. That’s evident in our results. Sales in John Lewis & Partners were up 0.7 per cent (down 1.4 per cent like-for-like). Weaker Home sales combined with gross margin pressures drove around half of the reduction in profits, with the remainder largely due to additional IT costs and property related items.

“In the year we stepped up our service difference. We made several improvements to convenience, with shorter delivery windows and live order tracking in John Lewis & Partners, and trials of in-home services across both brands. We achieved our highest ever levels of customer experience ratings in John Lewis & Partners.”

BREXIT

“We expect 2019 trading conditions to remain challenging. We have been preparing for the operational implications of Brexit for well over a year, and are in a good position for a managed transition. This covers currency, tariffs, customs and labour. The main risk in an unmanaged transition is a strong fall in consumer confidence and the impact that has on trade.”