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John Lewis warns for more jobs cuts.

 

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The John Lewis Partnership has warned of fresh job cuts after it scrapped its staff bonus for the second time in three years and reported only the second annual loss in its history. The employee-owned group said it made an underlying pre-tax loss of £78 million in the year to January 28, compared with analysts' expectations of a £50 million loss and a £181 million profit the year before. Write-downs of the value of Waitrose supermarket stores after poor trading took the overall loss much higher, to £234 million. She said profits had been hit by a £180 million rise in costs driven by higher commodity prices, energy bills and staff wages, inflationary pressures, property write-downs, supply chain challenges and a fire in one of its warehouses.

Dame Sharon White, the chairwoman,  apologised to the partnership's 74,000 staff for not paying an annual bonus for only the second time since 1953, blaming it on «a tough set of results». Waitrose sales fell 3% to £7.31 billion, and John Lewis sales rose 0.2% to £4.94 billion. However, the partnership said that the online growth of the pandemic had been «partly reversed», and shoppers were buying more groceries from discounters. The figures were published a day after the parent group of John Lewis, and Waitrose appointed the former Hovis boss Nish Kankiwala as its first group chief executive.

Anyday's cheaper fashion and home product range took in more than £160 million in sales during the year. White, 55, said the group responded to its difficulties by tripling its target for cost savings to £900 million by January 2026. The increased savings will likely include an extra £236 million from further «simplification». The partnership insisted the balance sheet remained strong, with £1 billion of cash on hand, but there is no doubt there are concerns about the future of the business.

Kankiwala, 65, had been a non-executive director at the partnership since April 2021 and provided counsel on its transformation plan. Although he has enjoyed a glittering career at Burger King, Pepsi and Hovis, he has yet to gain direct experience at leading retailers such as John Lewis.

The boss of the John Lewis Partnership has insisted the company's five-year transformation plan, aimed at reaching annual profits of £400 million by 2025, is «on track» despite falling back into the red. A «huge focus» for the next two years is «supercharging» the business's efficiency programme – otherwise known as «lean, simple, fast» – to convert more of its sales into profit, Dame Sharon White, its chairwoman, said. The company's new chief executive, Nish Kankiwala, will «provide some balance in terms of that pace and that execution», she added. White introduced the partnership plan in October 2020 amid falling sales at the department stores-to-supermarkets group.

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  1. Stephanie17 March 2023 at 13:29

    WOW! Only the second time since 1953! 70 years and just 2 years of no staff bonus! It's sad to see such a big brand, that seems to cherish their employees, having such problems.

    ReplyDelete

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