John Lewis cuts losses to £29m despite costs of store closures

John Lewis Partnership reduced its losses to £29m in the first half of its financial year, as it benefited from business rates relief, but paid out millions of pounds in redundancy payments and property closure costs.

The group behind John Lewis and Waitrose said it had benefited from £58m of business rates relief and would decide if it would return that to the government by March next year as it faced “significant uncertainty” about trading over the important Christmas period.

Sales for the group rose 6% to almost £5.9bn in the first half to 31 July, despite high street lockdowns and the permanent closure of 16 department stores and several supermarkets. About 300 people left the business in the half year, but the group has previously announced that it is consulting staff on more than 2,500 job cuts.

The group has benefited from its significant investment in online shopping.

Sales at Waitrose rose 2% year on year and were 10% higher than pre-pandemic levels, largely driven by online expansion. John Lewis’s department store sales rose 12%compared with the same period last year, and were 1% better than pre-pandemic levels.

However, Sharon White, the chairman of the John Lewis Partnership, said: “As we look ahead, there is significant uncertainty. Like the whole of retail, we are managing global supply chain challenges and labour shortages. We are seeing inflationary pressures, which we expect to persist.

“Even with the success of the vaccination programme the course of the pandemic this winter is hard to call.”

John Lewis reduced losses in the first half of the year after crashing £635m into the red a year ago when it wrote off nearly £500m off the value of its department stores because they were no longer as profitable.

The company did not pay out its annual staff bonus this year and has said it will not do so until annual profits exceed £150m. White has promised a payout of at least 10% if profits rose by about £300m.