Rumour returns: new John Lewis boss sees higher profits as he hails recovery

The boss of John Lewis said “enthusiasm is back” and said the group is on track to make significantly higher profits this year.

After a dismal period of decline, the department store and Waitrose owner struck an upbeat tone after cutting losses in the first half of its financial year.

Chief executive Nish Kankiwala said customers had responded enthusiastically to last week’s decision to reinstate its promise to “never undersell.”

“These results confirm that our transformation plan is working,” he added. “Enthusiasm has returned.”

Losses in the 26 weeks to July 27 narrowed to £30m, down from £59m in the same period last year. This followed cost cuts, including the loss of 300 jobs.

Groupwide sales rose 2 per cent to £5.9 billion, including a 5 per cent rise to £3.9 billion at Waitrose.

But sales fell 3 per cent to £2 billion at department store John Lewis as customers cut back on spending on big-ticket items.

In a moment of vindication for outgoing chairwoman Sharon White, the 95-year-old employee-owned group said it was “on track to deliver significantly higher profits” for the full year compared with last year.

John Lewis is locked in a trade battle with a resurgent Marks & Spencer.

Both are offering shoppers more third-party brands, with John Lewis yesterday revealing it has signed deals with bookseller Waterstones and cosmetics firm Trinny London.

Former Tesco UK boss Jason Tarry will replace White next week, supporting him through a handover period until the end of the year.

Tarry is considered a trusted figure given his credentials as head of Britain’s largest supermarket.

Last week, John Lewis brought back its pledge to “never undersell” in a new price match with 25 competitors including Boots, M&S and Dunelm. The move was scrapped in August 2022 to the dismay of customers.

After being accused of losing its way and focusing too much on non-retail areas such as real estate, the business finally returned to profitability this spring.

The employees, known as partners, have been without an annual bonus, one of the most prized aspects of working for the company, for two years.

The businessmen said yesterday that the board of directors will decide in March next year whether to resume the reward.

The company tends to make most of its profits in the run-up to Christmas, so it is expecting an even better second half.

And it will invest £500m this year as part of a plan to open more than 100 Waitrose convenience stores over the next three to four years.

In fashion, the new autumn and winter ranges include Princess Beatrice’s favourite brand, The Kooples, and Danish fashion label Numph.

And she has launched a collaboration with the haute couture brand AWAKE Mode, worn by singer Katy Perry and actress Renee Zellweger.

It also has plans for a huge new beauty salon at its flagship Oxford Street store, stocking fashion brands such as Sol de Janeiro to attract younger shoppers.

Clive Black, retail analyst at Shore Capital, said: ‘Overall, it is gratifying to see this British retail institution exit the operating room and almost exit the medical room as well.

“Culture, which is reflected in customer service and satisfaction, will be the key to our success. In this respect, JLP is fortunate to have Jason Tarry as Chairman, he is a first-class man.”