John Lewis Partnership is embarking on a strategic review under new chair Dame Sharon White after reporting “weaker profit than hoped for”. What does that mean for the department stores business and what can be expected over the next few years?
Traditionally the more profitable part of the group, margins at John Lewis department stores have taken a slide over the past couple of years.
Operating profit before bonus and exceptional items fell 65.6% to £39.5m, down from an already reduced £114.7m a year ago. Last year there were charges of £123m against the division, reflecting shops “playing less of a role in driving online purchases”. Gross sales fell 2.1% and like-for-like sales by 1.8%.
At grocer Waitrose, results were more encouraging. Operating profit (before bonus) reached £211.9m, up 6.4%. Like-for-like sales edged down 0.2%. Following a handful of store closures, the food business appears to be performing well in a tough trading environment. Profitability at Waitrose has overtaken that of the rest of the business.
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