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Brexit warning from John Lewis as it posts half-year loss

John Lewis Partnership swung to a loss of £25.9m in the half year ended 27 July 2019, down from an £800,000 profit during the same period last year.

Gross sales at the partnership, which includes John Lewis and Waitrose, fell 1.2% during the period. 

The group blamed subdued consumer confidence, IT investment and cost inflation for its losses in the first half.

John Lewis made an operating loss before exceptional items and the cost of implementing IFRS 16 [a new property leasing standard] of £61.8m, compared with a £19.3m loss last year.

The department store’s gross sales dipped 1.8% to £2.04bn. Like-for-like sales were down 2.3%.

However, outgoing John Lewis Partnership chairman Sir Charlie Mayfield said there had been ”strong sales growth in fashion and beauty”, adding that the retailer has ”grown market share significantly as customers responded to our investment in own-brand redesign, new brands, advisory services and personalised shopping experiences”.

Sales of its redesigned own-brand womenswear were up 5.7% year on year.

Mayfield warned that, should the UK leave the EU without a deal, the effect would be ”significant” and “it will not be possible to mitigate that impact”.

”In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness,” he added.

”However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”

Readers' comments (1)

  • darren hoggett

    Typical senior management in that they blame anyone but themselves, yet still insist in taking larges salaries that they do not deserve and the business cannot sustain.

    Bad management, making bad decisions. We see it all the time in this industry and now the chickens are finally coming home to roost.

    Sympathies? Not justified.

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