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John Lewis profits fall 27%

John Lewis saw operating profit fall back 26.8% to £146 million for the year ended January 31, but sales were flat at £2.81 billion.

John Lewis recorded a 3.4% fall in like-for-like sales after trade worsened towards the end of 2008, but fashion put in a strong performance over the year, with sales of the category up 4.7% over the year.

John Lewis said that it had increased fashion market share over the year, boosted by the new brands it had introduced and an improved own label offer.

“We expect trading conditions for 2009 to continue to be very tough, with ongoing pressures on consumer spend and low consumer confidence. As a result, we anticipate that price competition will be as intense as last year and we are prepared to meet these challenges.”

John Lewis said that profits at the department store had fallen back as a direct result of a sales decline in existing stores and the cost of new openings. It added that margin had held up, despite increased competition on price.

John Lewis Partnership, which also includes figures from its grocery chain Waitrose, saw sales rise 3% to £6.97bn. Operating profit fell back 18% to £323.5m, which resulted in a fall in the staff bonus from 20% of salary last year to 13% of salary in 2008, equivalent to around seven weeks’ pay.

John Lewis said that sales in the five weeks since the year end had continued to be tough, with department stores sales behind 6.8% - an 8.8% like-for-like sales decline.

The department store said in a statement: “We expect trading conditions for 2009 to continue to be very tough, with ongoing pressures on consumer spend and low consumer confidence. As a result, we anticipate that price competition will be as intense as last year and we are prepared to meet these challenges.”

For the full results see the attached Pdf document in the “related files” section on the right of the page.

Related files

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