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Under fire: President Dame Sharon White
John Lewis is expected to report a surprise return to profits this week as it plans a major round of job cuts.
Figures due to be published on Thursday are expected to show three consecutive years of losses at the retail giant have been reversed.
But the 76,000 hard-working business owners behind John Lewis department store and Waitrose supermarket are back in line to receive no bonuses.
The change in financial fortunes is a boost for the group’s disputed president, Dame Sharon White.
It previously warned that John Lewis would not return to sustainable profits before fiscal 2028.
Experts said the main reason for making a profit in 2023 was the impact of an aggressive £900m cost-cutting program rather than an increase in sales at Waitrose or department stores.
Both the supermarket and department stores have suffered years of poor performance.
This was exacerbated by the cost of living crisis.
In food, Waitrose has lost market share and is about to be overtaken by a revived Marks & Spencer.
Department stores have struggled since White abandoned the promise of “never knowingly undersold” prices.
Nick Bubb, an analyst at independent investment research firm Hardman & Co, said the cost-cutting program had started to take effect in the second half of last year.
It has forecast profits of £25m for the year to January 2024, compared with a loss of £234m after one-off items the previous year.
But in a sign that John Lewis is not out of the woods yet, staff will miss out on a bonus for the third time in four years.
In a video message earlier this year, White (pictured) told them to prepare for “pretty big changes and pretty bold changes.”
John Lewis “will bounce back in spades this year,” he added. He is considering reducing his workforce by 11,000 people (or one-tenth) over the next five years and reducing severance pay. But he is also increasing pay for factory workers by 10 per cent to a minimum of £11.65 an hour across the UK and £12.89 in London from next month.
This week, John Lewis may also give an update on the search to replace White, 56, who is stepping down after five years as chairman. This is the shortest term in the association’s nearly 100-year history. She was the first woman to lead John Lewis, but she faced controversy after she considered breaking up the company’s historic structure of employee ownership by selling a stake to outside investors to raise money to invest in the business. However, that plan was later abandoned.
His lack of retail experience and civil service experience were also attacked, as were his plans to expand into financial services and property before core retail activities were sorted out.