The John Lewis Partnership has revealed that it does not expect to reopen all its department stores as coronavirus lockdowns are eased.
The company, which includes the Waitrose supermarket chain, announced last year that it would not pay a bonus to its staff - known as partners - for the first time since 1953 and cut 1,300 jobs amid Covid-19 restrictions on stores.
It said then that eight stores were to go, including its Birmingham, Watford and Newbury sites and The Sunday Times has since reported that eight more are at risk. Such a scenario, if realised, would leave just 34 surviving John Lewis stores.
Substantial Exceptional Costs
The John Lewis Partnership reported group pre-tax losses of £517 million for the year to 30 January compared to profits of £146 million for 2019. John Lewis blamed "substantial" exceptional costs of £648 million which, it said, reflected a write down in the value of John Lewis shops "owing to the pronounced shift to online" during the crisis. It also flagged wider restructuring and redundancy costs.
The company said that profits before exceptional items of £131 million would not have been achieved without £190 million of financial support from the government, covering business rates relief and furlough.
Waitrose Growth
Waitrose grew trading operating profit to £1.1 billion as it benefited from its status as essential retail, with like-for-likes sales up by 10%. Comparable John Lewis sales were flat, though online sales at John Lewis surged by 73% during the year to help limit the impact of shuttered stores.
Any further John Lewis store closures would inevitably lead to more job losses, although the chain is expected to limit the damage through redeployment where possible.
The partnership also warned that £800 million of investment, mainly in its online capabilities, would knock its financial performance even further in the current year.
Its chair, Dame Sharon White, said: "There is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store. Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain. We are currently in discussions with landlords and final decisions are expected by the end of March. We will do everything we can to lessen the impact and will continue to provide community funds to support local areas."
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