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John Lewis Partnership

John Lewis swings to loss as it warns of 'significant' no-deal Brexit impact

“Should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate that impact,” chairman Sir Charlie Mayfield said

John Lewis

John Lewis Partnership slumped into the red in the first half with the British retailer blaming Brexit uncertainty for hurting consumer confidence.

The group, which owns the John Lewis department stores and Waitrose supermarkets, swung to an underlying loss before tax of £25.9mln in the six months to 27 July from a profit £0.8mln a year ago while gross sales fell 1.2% to £5.4bn.

The company said the losses reflected weaker sales in some categories like homewares, cost inflation and IT costs.

John Lewis was particularly weak with same-store sales falling 2.3% and the operating loss before exceptionals swelling to £61.8mln from £19.3mln last year. Waitrose sales dipped 0.4% on a like-for-like basis but the operating profit before exceptionals increased 14.7% to £110.1mln as margins improved after a review of product categories.

Chairman Sir Charlie Mayfield said he expects the tough retail conditions to persist and warned that a no-deal Brexit could hit the business hard.

“Should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate that impact,” he said.

 “We have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness. However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”

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