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- JLP’s pre-tax losses fell to £29m in the six months ended 27 July
- The company plans to save £900m over five years through a restructuring programme.
John Lewis Partnership has hailed the success of its turnaround plan after the retail giant revealed its losses had almost halved over the past year.
The owner of Waitrose and the iconic department store owned by its 74,000 employees said its pre-tax losses fell by £27m to £29m in the six months ended July 27.
John Lewis is carrying out a major restructuring plan that aims to save £900m over the next five years to 2026, partly through redundancies rather than replacing vacant jobs.
Best fit: John Lewis Partnership, owned by its 74,000 employees, reported that its pre-tax losses fell by £27m to £29m in the six months ended July 27.
It said it was on track to meet this target, having achieved savings of £500m since January 2021, including £78m in the most recent half year.
At the same time, John Lewis is investing millions to streamline its operations, including technological upgrades such as digital headphones and refurbishing or launching new Waitrose stores.
The London-based group said the investment was generating greater efficiency and helping to increase its operating profit margin by 1.1 percentage points, while attracting more traffic.
Its total customer base increased by around 500,000 to 23.1 million, with Waitrose achieving its tenth consecutive quarter of growth and gaining 300,000 more shoppers during the six-month period.
Waitrose’s adjusted operating profit rose by £75m, offsetting a £24m fall in the John Lewis business caused by lower sales and investment in improving customer service.
John Lewis’s turnover fell 3 per cent to £2 billion, which it blamed on weaker demand for “high-priced” homewares and fashion sales hit by bad weather and a “well-documented” reduction in revenue.
The company expects further profit growth in the second half of the year, when it traditionally makes the bulk of its profits.
While acknowledging an “uncertain” consumer environment, John Lewis is “confident” that full-year profits before exceptional items will be “significantly higher” than the £45m it made last year.
Nish Kankiwala, chief executive of the John Lewis Partnership, said: ‘These results confirm that our transformation plan is working and we expect profits to grow significantly over the full year, a marked improvement on where we were two years ago.
“While we still have much more to do, we are well prepared for a positive peak operating period and on track to significantly improve our full-year performance.”
John Lewis’ trading update comes three days after the retailer brought back its “never knowingly undersold” slogan after a two-year absence.
Under the pledge, first introduced in 1925, the chain promised to refund customers within 28 days of purchasing a product if that same item could be purchased elsewhere for a lower price.
It was abandoned in 2022 amid worsening inflationary pressures in the UK and strong competition from online giants such as Amazon.
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