John Lewis has warned that not all of its stores will reopen after lockdown restrictions ease on April 12 although it plans heavy investment in those that do remain.
“There is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” said Dame Sharon White, the partnership’s chair. “Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown . . . we are currently in discussions with landlords and final decisions are expected by the end of March.”
The partnership made a pre-tax profit before exceptional charges of £131m, up £61m from the previous year. But the figures do not include £648m of exceptional charges, many of which were announced last September, which resulted in an overall pre-tax loss of £517m.
White said the company will continue to accept business rates relief in the current financial year, saying such support helped keep the business in profit during the year to January.
“The business rates relief has helped to keep us running and avoid more severe restructuring of the partnership, which would have put more jobs at risk at a time when the high street is already under pressure,” she said.
The company had already told its 78,000 employees or partners that there would be no bonus after a year in which it closed eight of its 50 department stores and made more than 3,000 staff redundant.
It is trying to cut £300m of annual costs as it grapples with a shift to ecommerce that has been accelerated by the pandemic, and plans to expand its financial services business and launch ventures in new business areas such as outdoor living and even social housing.
The group’s store estate will be reshaped over the coming five years, with more outlets designated “destination stores” with space given over to experiences, along with smaller-format local shops and more John Lewis stores within larger Waitrose supermarkets.
The group said trials in Godalming, Horley, Wallingford, Lincoln and Lymington had yielded “positive” early signs. “Our plan is for all the general merchandise in Waitrose shops to be sourced from John Lewis,” White said.
Revenue at the department stores was 2 per cent lower, as ecommerce picked up many of the sales lost through coronavirus-related shutdowns.
At the group’s upmarket Waitrose supermarkets, sales rose 10 per cent to £7.6bn as the closure of pubs and restaurants for large parts of the year increased the proportion of meals eaten at home.