UK (Commonwealth) _ After three years of deficits, the owner of Waitrose and John Lewis has made a profit, abandoning plans to collect nearly half of its revenue from sources other than retail by 2030.
The group will focus “unashamedly” on its retail offering, opening more Waitrose stores and renovating those that already existed, as well as revitalizing John Lewis’s product line, according to departing chair Dame Sharon White. The group has abandoned specific targets for its financial services and build-to-rent divisions, which was a fundamental component of her previous vision.
In 2020, White came from the media regulator Ofcom, where she made a commitment to construct and lease 10,000 houses as part of her goal to earn 40% of earnings from non-retail ventures. She stated that both divisions were critical to the long-term success of the largest employee-owned company in the UK on Thursday, but she attributed the decision to abandon the objectives to inflation and rising interest rates.
This is not a “either or” situation, she continued, because the family of complementing enterprises will always be crucial to the collaboration. The choice was made after Nish Kankiwala, the partnership’s first chief executive who was hired a year earlier to fill a position that White had established, “refreshed” the turnaround strategy and assured employees in November that retail would be given priority.
The John Lewis Partnership had pretax earnings of £56 million (€65 million) in the year ending in January as opposed to a deficit of £234 million (€273.8 million) the year before. Sales increased by 1% to £12.4 $14.5 billion, or billions. The turnaround was aided by supermarket chain Waitrose, which raised prices to counteract department retailer John Lewis’s worse performance.
Waitrose’s sales increased by 5% to £7.7 billion (€9 billion), mostly due to an average 6.6% price rise. John Lewis had a 4% decline in sales to £4.8 billion (€5.6 billion). Waitrose saw a year-over-year improvement in trading operating profit of £170 million (€199 million) to £1 billion (€1.17 billion), while John Lewis saw an increase of £13 million (€15.2 million) to £689 million (€806 million).
John Lewis stated that, despite the better performance, bonuses will not be given to employees at a time when changes to redundancy compensation and rumors regarding potential employment losses. Instead, the partnership said that it will boost investment from £312 million (€365 million) to £542 million (€634 million) in the current fiscal year.
According to White, there were no set goals for layoffs, and as the business grew more streamlined and adaptable, “that will mean that there’s fewer requirements for some roles over the years to come.” Both businesses “achieved more cost savings than we expected” in the second part of the year, according to independent retail researcher Nick Bubb. Against a goal of £900 million (€1 billion) by January 2026, the business has saved £420 million (€491 million) since 2021.
Mr. Bubb said, “The retailer decided to reinvest in the company as well as wages, even though there might have been only sufficient funds there to pay a small bonus.” In order to strengthen its financial sheet, the firm secured an extra £260 million (€304 million) in December through the sale and leaseback of 11 Waitrose stores as well as a new loan. It cannot raise equity externally due to its unique structure.
The company forewarned at its half-year results in September that it would take an additional two years to finish the department store chain and supermarket’s recovery, moving them from 2025–2026 to 2027–2028.
White declared in October that she will retire in 2025, barring the discovery of a replacement before then. She chaired the company on Thursday, calling it “the most extraordinary privilege,” but she made no more comments about the procedure.
The British company John Lewis & Partners, formerly known as John Lewis, is a chain of upscale department shops with locations across the United Kingdom and Ireland. As a member of the John Lewis Partnership, the brand distributes general items. Son of the founder, John Lewis, Spedan Lewis, developed it in 1929. “Never Knowingly Undersold” was the name of the chain’s vow to always at least match a lower price provided by a national high street rival, which ran from 1925 until 2022.
There are now 35 John Lewis stores spread across Great Britain, with the first one opening its doors on Oxford Street in London in 1864.
