John Lewis Partnership’s half-year results on Thursday appear to have reassured onlookers that the British staple has turned a corner and is on the rise one more.
Though the update showed Waitrose’s performance offset lower revenue at John Lewis, analysts said a near halving in partnership losses proved improvements were underway.
This saw losses dip from £59 million to £30 million over the six months to July, following cost-cutting efforts which have seen jobs go at John Lewis in recent years.
Shore Capital analysts noted the figures showed “further progress in its journey of self-improvement,” following a “deep low” in the wake of the pandemic, adding the cuts would be “critical” for future success.
“All in all, it is pleasing to see this British retail institution out of the surgical ward and almost exiting the medical one too,” Shore Cap said.
Analysts added the improving figures, which the partnership said should translate into stronger profitability this year, would also be comforting for new chair Jason Tarry as he settles into the role this month.
This will likely be further aided by the Christmas period ahead, Third Bridge analysts pointed out, adding this usually saw John Lewis outperform rivals.
Whether John Lewis’ move to bring back its ‘never knowingly undersold’ pledge earlier this month after just two years would help with this divided opinion, though.
Shore Cap warned shoppers may have moved on from being swayed by such promises, which will see the chain match prices of branded goods with dozens of rivals, and argued the decision was surprising.
However, Third Bridge dubbed the move “great news,” suggesting customers did indeed value such assurances.
If the move can further push customer numbers up, after John Lewis reported a 0.5 million increase over the first half, remains to be seen, with “the devil [...] in the detail,” according to Shore Cap.
“Our experts don't expect John Lewis to return to its former glory quickly,” Third Bridge said, adding that “A phased approach” was needed.
“However, phase one is crucial - clearly defining the brand and setting a strong foundation.”