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John Lewis chairman cautions over Brexit uncertainty

John Lewis Partnership chairman Sir Charlie Mayfield has said weakened consumer confidence following Brexit will continue to affect the group in the second half of the year.

Profits at the group behind the department store and Waitrose were hit by inflationary pressures driven by exchange rates and political uncertainty for the six months to 29 July. Profit before tax at the partnership more than halved slumping by 53.3% to £26.6m. 

However, at John Lewis alone operating profit before exceptional items and property profits grew 10% to £39.7m. Gross sales at the department store grew by 2.3% to £2bn and like-for-like sales inched up by 0.1%. 

Mayfield called for “serious parliamentary debate” to “figure out what kind of Brexit we’re going to have in the best interests of the country and the economy”.

“We recognise that the issues related to leaving the EU are extremely complicated but we do want to see justice [to talks] being done to address that complexity.

“There is a very complex negotiation before us and the core principles of that need to be thrashed out in order to increase the chances of a successful conclusion to the negotiation. If not, there is a greater risk of a disorderly outcome,” he added. 

The news comes as the department store plans to ramp up its fashion offering. John Lewis boss Paula Nickolds said John Lewis will be taking advantage of its “eye-catching” uplift in fashion sales following its half-year results.

Nickolds said: “We have some very exciting developments coming up this autumn. We have invested significantly in our fashion design and technology resources. It’s one of the areas we see significant opportunities in. We have a loyal and deep relationship with our customers, and are [targeting them with] unique ranges. We are very encouraged by our progress in this area.”

Fashion sales grew 3.5% in the first half of the year, boosting a 2.3% rise in gross sales at the department store chain. Womenswear was highlighted as a standout performer after increasing by 5.8%.

Nickolds added that the business is on track regarding its longer term ambition of having 50% of products as John Lewis exclusives, referencing the successful launch of its in-house denim lifestyle label And Or.

Meanwhile the business expects “similar levels” of discounting this year as the trading environment remains competitive.

John Lewis integrated fashion content into its 50,000 sq ft in-house content production hub at the start of this year in London’s Origin Park, bringing the majority of its fashion shoots in-house. It previously solely shot digital content for its home offering.

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