Department store John Lewis is to invest a record £200m in its business this year as it plots overseas expansion.
Managing director Andy Street said the retailer will invest the money to ensure John Lewis stays “ahead of the customer and the changing ways that they shop”.
The investment, which is up on the average £150m - £160m spent in recent years, will be made across online, new shops and refurbishments, and a new distribution centre to “support omnichannel leadership”.
“2013 will be a year of real investment,” said Street. “It shows our confidence in the business.”
John Lewis will also seek to expand overseas by wholesaling in department stores following a “very successful” trial in South Korean department store Shinsegae last year. It will also launch dedicated websites for France and Germany by the end of the year.
“There are future opportunities to partner with other prestigious department stores around the world through that wholesale model,” Street told Retail Week.
However, he added there was “no intention to open physical shops” overseas.
John Lewis like-for-likes grew 10.5% in the year to January 26, while revenue surged 13.5% to £3.05bn.
Operating profit rocketed 37.2% to £216.7m.
Online sales increased 41%, and the channel now represents 25% of sales. Click-and-collect represents 27% of online sales.
Since year end, like-for-likes jumped 13.7%. Street said the two weeks of heavy snow in January were its weakest trading weeks out of the first five weeks of the new financial year, but added that John Lewis still generated a 4% like-for-like sales rise. “We grew our sales nicely in the snow weeks,” said Street. “It reflects the strength of online business, it’s the omnichannel thing playing out.”
John Lewis outperformed rival Debenhams, which rushed out a surprise profit warning on Monday which it blamed on a 10% like-for-like slump in the same snow-effected weeks.
Street said the “turmoil on the high street helped John Lewis in the last five years” as shoppers sought trusted brands that they know will be around in years to come.
In the year electricals, home and technology sales jumped 29%, representing John Lewis’ best performing category.
Street played down the effect of the collapse of Comet, saying that the category performed strongly all year, not just in the fourth quarter, when Comet collapsed. “It gave us a little advantage but that’s not what is behind the number,” he said.
Fashion sales were up 9% as brand collaborations helped drive performance. Home sales grew 6%.
The retailer is second in the market in both home and electricals. Two years ago it held fifth place in both categories.
Street said John Lewis’ strong performance was a “bricks and clicks success story”.
He said the retailer’s sales were “underpinned by distribution, creating flexibility and reliability in supply chain, [price promise] Never Knowingly Undersold, and trust, particularly in the fourth quarter when we saw such dislocation in the electricals market”.
The retailer opened seven shops in 14 months which is the fastest pace of openings ever for John Lewis.
Video: John Lewis Partnership reports 17% bonus as profits soar 15.8%
- Currently reading
Video: John Lewis to invest a record £200m as it plots overseas expansion