John Lewis Partnership Reports £78 Million Loss, No Bonus Payment for Staff
The John Lewis Partnership has reported a £78 million loss for the financial year ending 28 January 2023, with total partnership sales down 2% to £12.25 billion and Waitrose sales down 3% to £7.31 billion.[0] Despite John Lewis sales edging up by 0.2% to £4.94 billion, the huge loss meant that no bonus payment could be offered to staff for only the second time since 1953.[1]
The inflationary pressures on the business have been hard felt, with the costs soaring by almost £180 million compared to the year before.[2] The partnership plan has been adapted to improve profitability, with a target of tripling its cost savings to around £900 million by January 2026.[3] This includes an extra £236 million from further “simplification”, which is likely to lead to job losses.[4]
The increased costs and drop in sales came alongside a number of product supply problems, with a fire at its Brinklow warehouse hitting availability at Waitrose in the summer.[5] However, Chairwoman Dame Sharon White said that availability had been recovered by autumn.
John Lewis drafted in its first ever chief executive earlier this week, appointing retail veteran Nish Kankiwala to work closely with the chair.[3] It is anticipated that he will have a crucial part in assisting the store to reduce expenses and strengthen its financial position.[6]
White apologised to staff for the lack of bonus payment after a “tough set of results” and said that despite the losses, the financial assistance fund will remain at £800,000 and there will be support for travel, childcare and living costs.[7]
In a statement, White said: “The mantra for the year is cost out, margins up and customer focus.[8] As we need to become more efficient and productive, that will have an impact on our number of partners.[4]
0. “John Lewis Partnership insists transformation plan ‘on track' despite £234m loss” Marketing Week, 16 Mar. 2023, https://www.marketingweek.com/john-lewis-transformation-on-track-despite-loss/
1. “John Lewis Partnership swings to a loss, bonus cancelled” Proactive Investors UK, 16 Mar. 2023, https://www.proactiveinvestors.co.uk/companies/news/1009256/john-lewis-partnership-swings-to-a-loss-bonus-cancelled-1009256.html
2. “John Lewis blames ‘pain of inflation' for large losses and takes bonuses off the table | Retail Bulletin” The Retail Bulletin, 16 Mar. 2023, https://www.theretailbulletin.com/department-stores/john-lewis-blames-pain-of-inflation-for-large-losses-and-takes-bonuses-off-the-table-16-03-2023/
3. “John Lewis partner bonus scrapped as profits sink despite stellar fashion performance” just-style.com, 16 Mar. 2023, https://www.just-style.com/news/john-lewis-partner-bonus-scrapped-as-profits-sink-despite-stellar-fashion-performance
4. “John Lewis warns on jobs as staff lose bonus, profits slump” ShareCast, 16 Mar. 2023, https://www.sharecast.com/news/news-and-announcements/john-lewis-warns-on-jobs-as-staff-lose-bonus-profits-slump–12695264.html
5. “No staff bonus at John Lewis as partnership plunges to hefty losses” Evening Standard, 16 Mar. 2023, https://www.standard.co.uk/business/bonus-john-lewis-partnership-losses-waitrose-b1067626.html
6. “John Lewis Partnership bonus axed as losses balloon” This is Money, 16 Mar. 2023, https://www.thisismoney.co.uk/money/markets/article-11866933/John-Lewis-Partnership-bonus-axed-losses-balloon.html
7. “Huge department store chain to axe annual bonus for staff for the second time in 70 years…” The Sun, 16 Mar. 2023, https://www.thesun.co.uk/money/21730748/john-lewis-axe-annual-bonus-for-staff/
8. “John Lewis reports loss, no staff bonuses and potential job losses” Toy World, 16 Mar. 2023, https://toyworldmag.co.uk/john-lewis-reports-loss-no-staff-bonuses-and-potential-job-losses/
