JOHN LEWIS PROFITS HAS A DRAMATIC DROP-DOWN BY 99% AS BREXIT ROW ERUPTS
The John Lewis Partnership blamed heavy discounting by rivals and the cost of new stores and IT for a near 99% plunge in first-half profits.
Posted by Times News on Thursday, 13th September 2018
The retail group, which owns Waitrose supermarket, also put the dramatic drop in sales down to "challenging times" for the high street.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said that it had "seen an unprecedented level of price matching" because other retailers have "discounted heavily".
Today’s report details the company’s finances, and said that profit before tax and exceptional items came in at £1.2million - down £95million on the same period last year.
The retailer did not specify any plans to close stores or put jobs at risk. Chairman Mayfield added: "With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole."
The trading update comes after reports that department store Debenhams called in advisers to help save the struggling chain.
The embattled department store chain is fighting to keep its 240 stores open following a sharp fall in profits and tumbling share prices as consumers turn to online shopping.
Its troubles come just a month after House of Fraser, another staple UK department store chain, collapsed into administration, before being bought out by Sports Direct owner Mike Ashley.
The UK’s Brexit secretary, Dominic Raab, to criticise businesses for blaming poor performance on Brexit, after John Lewis said uncertainty about the outcome of EU talks was partly to blame for the expectation that profits would be “substantially lower” than last year.
“It’s probably rather easy at this moment in time for any business which isn’t doing rather well to point to Brexit,” Raab told BBC Radio 4’s Today Programme. “But let me just give you the facts. This week we’ve had economic growth accelerating, we’ve had real wages accelerating …”
He added: “I don’t doubt that uncertainty around these negotiations will have an impact on business. That’s why we are putting all our energy into getting the good deal that we want with our EU friends and partners, while making sure we manage the risks if it doesn’t happen.
“All I’m gently saying it’s rather easy for a business to blame Brexit and the politicians rather than taking responsibility for their own situation.”
Editor: Jian Ping Sun