The John Lewis Partnership has revealed a return to annual profit, after making a series of productivity improvements and achieving rising sales in fashion and beauty. Staff, however, will continue to miss out on their annual bonus.
The partnership – which owns the John Lewis department stores and Waitrose supermarket chain – reported pre-tax profits of £56 million for the year to 27 January against losses of £234 million in the previous year. Sales across the partnership were up 1% at £12.4bn.
It said that after “careful consideration” it would not pay its workers an annual bonus for the second year running, but said it would increase overall pay for employees by a record £116 million this year. This marks only the third time since 1953 that the group has not paid out an annual staff bonus.
The company said it cut costs by £88 million in the past financial year, with changes to staff hours and “simplified ways of working” across shops and central teams.
It said it would look to increase investment in 2024-25 by 70% to £542 million, which will focus on modernising technology, refreshing its shops and simplifying the group.
At the John Lewis side of the business, the company reported improved sales in both fashion and beauty, however home and technology were down, which led to a drop in overall sales at the department store to £4.8bn. Trading operating profit for the department store was £689m, representing a £13m improvement year-on-year.
Looking ahead, some 80 new brands are expected to be added to the department store line-up (170 new brands have already been added) to improve desirability further, and the company said it had attracted a record number of customers at 13.4 million.
It also plans to invest in improving the online experience through easier navigation and personalised product recommendations. Staff training will also be a priority to improve customer experience.
At Waitrose, sales were up 5% to £7.7bn with a trading operating profit of £1.064 billion. Further store openings and refurbishments are planned for the coming year.
Speaking of its future plans, the company said: “Given the significant changes in the economy since we announced our strategy in 2020, we have refreshed our plan.
“We’re simplifying our business and improving productivity to generate stronger performance, from which we will invest to modernise and energise our unique customer offer.”
Dame Sharon White, Chairman of the John Lewis Partnership, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do.
“This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our partners.”
The group is reportedly mulling a 10% cut in its workforce, accounting for around 11,000 staff jobs, which would be culled over the next five years as part of aims to save £900 million by 2027-28.