The John Lewis Partnership has seen profits fall for the first half of the year, but sales have inched up after a boost from fashion.
Partnership operating profit, which covers both Waitrose and John Lewis, declined by 39.3% to £69m in the six months to 29 July.
This figure included an exceptional charge of £56.4m for restructuring and redundancy costs, relating to branch, distribution and retail operations as well as functional restructurings in finance, personnel and IT.
Profit before tax more than halved after slumping by 53.3% to £26.6m. Excluding exceptional items, it fell by 4.6% to £83m.
Operating profit before exceptional items was £125.4m, down 12.8% on last year.
However, operating profit before exceptional items and property profits grew 10% to £39.7m at John Lewis alone. Gross sales grew by 2.3% to £2bn and like-for-like sales inched up by 0.1%.
Fashion sales were up 3.5%, with a standout performance from womenswear, which rose 5.8%.
Meanwhile partnership gross sales were up 2.3%, at £5.4bn.
Sir Charlie Mayfield, chairman at John Lewis Partnership, said the results marked a “solid performance in a difficult market”.
He said: “As we anticipated in our full year results statement in March, the first half of this year has seen inflationary pressures driven by exchange rates and political uncertainty. These have dampened customer demand, especially in categories connected to the housing market. Against that backdrop, our market share gains in fashion stood out. The exchange rate driven increase in cost prices has also put pressure on margin. We have chosen to hold back on increasing prices across many areas.
“Sales growth has continued in the first few weeks of the second half. We are well set for our all-important seasonal peak, but we expect the headwinds that have dampened consumer demand and put pressure on margins to continue into next year. In addition, we will incur higher pension accounting charges in the second half year, as a result of low market interest rates. These will all impact our full year profits.”