John Lewis returns to profit, partner bonuses not in sight

After a tumultuous period of falling sales, John Lewis Partnership (JLP) has finally bounced back into the black. Yet while the news appears to be a turning point for the struggling retail group, it will mark another year of no bonuses for its staff.

In the year to January 27, JLP said it made a pre-tax profit of 56 million pounds, a 290 million pound improvement year-on-year. The group’s full-year sales, meanwhile, amounted to 12.4 billion pounds, up by one percent, while profit before tax was 42 million pounds, a further 120 million pound improvement compared to a 78 million pound loss in 2022/23.

While sales rose 5 percent at its portfolio supermarket Waitrose, sales at its department store chain John Lewis were less enthusiastic, dropping 4 percent to 4.8 billion pounds. Here, weak home and tech sales dragged figures down, despite sales in fashion and beauty being on the up for the year.

The retailer’s trading operating profit totaled 689 million pounds, up 13 million pounds YoY, while its gross margin also saw an improvement of 1.0 percentage points, supported by savings across the company’s supply chain and stores.

Despite seeing such improvements, JLP said that “after careful consideration” it would not be paying its partners (staff) a bonus for the year, believing that “investing in partner pay and improving [its] business must continue to take priority”.

JLP to make 542 million pound investment to support turnaround plan

As such, the company is planning to issue an investment of 542 million pounds to support its ongoing turnaround plan, which recently took a U-turn to focus more on its retail network, with the goal of simplifying its business and improving productivity in the meantime.

For the coming period, 2024 to 2025, JLP is expecting to continue in improving its profitability and key financial performance measures, including profit before tax and the partnership bonus.

Alongside the opening of new Waitrose stores, the group is also planning to introduce 80 new brands to its John Lewis locations, next to a rejuvenation of its Home category and store visual merchandising.

In a release, outgoing chairman, Sharon White, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.

“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and our partners’ commitment to delivering excellent customer service.

“This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our partners.”