The John Lewis Partnership has reported its first ever annual loss and warned that not all of its stores will reopen when the lockdown ends.
The retail group posted a loss before tax of £517mln in the year to the end of January compared to a profit of £146mln the year before, as it booked £648mln of exceptional costs, most of which related to the write-down in the valuation of its retail estates.
Revenue rose to £10.8bn from £10.2bn the year before, driven by a strong performance from its Waitrose supermarkets.
That side of the business is doing all right as supermarkets are deemed to be essential retailers and therefore allowed to remain open during lockdowns, but the John Lewis department stores have not fared so well, with customers turning to online alternatives while the John Lewis outlets have been shut.
The retailer’s own Johnlewis.com online business saw revenues rise 73% year-on-year and now accounts for about 75% of the department store’s sales, up from 40% before the pandemic.
The Partnership said that the closure of some John Lewis stores is inevitable but it did not reveal how many of the 42 branches are under threat.
“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” admitted Sharon White, the chair of the John Lewis Partnership.
It feels kind of ridiculous hearing people from Watford asking #JohnLewis to stay - department stores are no longer anchors people... other towns will also learn this soon @bbc5live #WakeUptoMoney
— Mark Hillary (em ????) (@markhillary) March 11, 2021
“All our John Lewis stores need to be exciting places to shop, more reflective of the tastes and interests of local customers. This will require investment and we are working closely with landlords and local authorities. We are keen to play our part in the revitalisation of the high street,” she added.
73% rise in online saves John Lewis from collapse and hastens revamp: https://t.co/xVKu6RlHpu #ecommerce #digital
— Simon Lilly ???? (@simonlilly) March 11, 2021