Britain's John Lewis Partnership slumps to first-half loss, scraps staff bonus
The John Lewis Partnership reported on Thursday a first-half loss of 55 million pounds ($71 million) and said the COVID-19 hit to trading had left it in the same position as it was after World War Two - unable to pay staff a bonus.Reuters | London | Updated: 17-09-2020 13:59 IST | Created: 17-09-2020 13:33 IST
The John Lewis Partnership reported on Thursday a first-half loss of 55 million pounds ($71 million) and said the COVID-19 hit to trading had left it in the same position as it was after World War Two - unable to pay staff a bonus. The owner of Britain's leading eponymous department store and the upmarket Waitrose supermarket said the closure of stores during the national lockdown and the purchase of low-profit products like toilet paper had hit overall trading.
Operating profit at the department store fell by 46% in the first-half to July 25. As a result, the employee-owned group will not pay its staff, known as partners, a bonus. "The Group found itself in a similar position in 1948 when the bonus was halted following the Second World War," it said. "We came through then to be even stronger than before and we will do so again."
The coronavirus pandemic has destroyed many retail businesses that were already struggling with high rents and taxes, and forced changes in consumer behaviour in five months that would normally take five years. With online now accounting for 60% of John Lewis sales from 40% before the pandemic, the group has already said it must diversify beyond retail if it is to survive the turmoil on Britain's high streets.
The challenge falls to Sharon White, a former government official and head of the media regulator Ofcom, who took charge of the company earlier this year. She will set out more details for her plans in October. The company said that its worst case scenario as set out in April for the full year of a sales fall of 5% in Waitrose and 35% in John Lewis remained its view. However, it now believes the most likely outcome will be a small loss or a small profit for the year.
($1 = 0.7717 pounds)