The John Lewis Partnership (JLP) said it made a £56m ($71.61m) pre-tax profit for the 52 weeks ended 27 January 2024 (FY23/24) compared to a £234m loss in the previous year.
The owner of retailers Waitrose and John Lewis said after “careful consideration” it would not pay its staff an annual bonus and instead stated: “At this point in our transformation, this is best served by investing in our retail businesses and in Partners’ base pay.”
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Zoe Mills the lead retail analyst at Global Data is convinced this is the “right move” for the company, but she suspects that inflation rates will soften throughout 2024, and expects volumes to be flat or negative, “highlighting that John Lewis must focus on price alongside services to entice shoppers to spend and trade up from value and discount retailers.”
Chairman of the John Lewis Partnership Sharon White expects profits to grow further this year and believes this shows the company’s plans are working.
She added that the company was “continuing to modernise our brand offering in John Lewis while prioritising pay for our Partners.”
John Lewis sales were £4.8bn, down 4%, however fashion, including beauty were up on the year, whilst home and technology saw weaker sales.
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By GlobalDataDespite a challenging year, the company said it delivered improved profitability in John Lewis driven by improved gross margin rate and productivity.
Mills added: “With inflation rates forecast to decelerate throughout 2024, John Lewis & Partners will hope it can entice lapsed shoppers back as they start to feel more financially secure.”
The company explained it had cut costs by £88m over the past year, with changes to staff hours and “simplified ways of working” in its stores and central teams.
John Lewis Partnership has previously scrapped bonuses in 2023 and 2020. At the start of the year, it signalled further job losses as part of its return to profit plan.
Key results from John Lewis:
- Total trading sales was down 4% to £4.8m
- Trading operating profit decreased by 2% to £689m
- Gross margin improved 1.0 percentage point and efficiency savings were made across supply chain and stores
- Introduced over 170 new brands in the financial year
Nish Kankiwala, CEO of the John Lewis Partnership commented: “I’m very confident in the next phase of our refreshed plan, which will focus on delighting our retail customers, offering excellent service delivered by our partners [staff].”
White announced in October 2023 that she would be stepping down from her position at the end of her five-year term. An industry expert told Just Style at the time that her short tenure did not end on a high and her replacement in early 2025 would “face significant challenges”.
