Staff at John Lewis are set to receive a 14% bonus after the retailer reported a rise in like-for-like sales despite a drop in profits for the year.
For the year to January 28, gross sales at John Lewis department stores were up 3% to £3.33bn with sales excluding VAT up 1% to £2.79bn. Like-for-like sales grew 1.3% in the year, but dropped 0.6% including VAT. Operating profit dropped by £40.5m, 20.4%, to £157.9m.
Sales online at johnlewis.com grew by 26.3%, to £680.8m (up £111.2m, 24.2% excluding VAT).
For the year gross sales at The John Lewis Partnership were up 6.4% to £8.73bn with sales excluding VAT up 5.4% to £7.86bn. Group operating profit was down £37.7m, 8.7%, to £393.3m, with profit before partnership bonus and tax down 3.8%, to £353.8m.
Charlie Mayfield, chairman of John Lewis Partnership, said: “We have achieved a good sales performance in a tough year for the economy. Profits are lower than last year, but better than expected and I’m delighted to announce that all 81,000 partners will be receiving a bonus equivalent to over seven weeks’ pay.
“Profound changes are taking place in the retail sector and importantly this was a year when we upped the pace of innovation and investment. That came at the price of some short-term profit but leaves us in a good place at the start of this year.”
He added: “To meet the challenges presented by a rapidly developing retail sector, we’ve made some significant changes to how the partnership operates. Examples include overhauling how we run Waitrose shops and expanding our new internal shared services division, partnership services, as well as the largest programme of investment we have ever mounted in systems and supply chain.
“We start this year leaner and fitter and have initiatives underway which will deliver key benefits in the coming years. We have first-class brands that are well placed to succeed in a changing market.”
With regards to current trading John Lewis said sales at the department store excluding VAT are 5.4% higher than last year, 2.4% on a like-for-like basis.
However, the retailer said that current trading conditions are still difficult and consumer confidence remains subdued but added the Queen’s Diamond Jubilee and the London 2012 Olympic and Paralympic Games will provide a lift for consumers.