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John Lewis reports H1 loss and reassesses channel balance

The John Lewis Partnership has published its unaudited financial results for H1 2020. Although sales were up +1% overall, shoppers spent more on less profitable lines, leading to a loss across John Lewis and Waitrose of £55m – a similar picture to H1 2019, but, says chairman Sharon White, “a creditable performance in the circumstances, and ahead of expectations”.

At John Lewis, online sales growth was strong at +73%, helping to offset the impact of shop closures – overall sales were down -10% YoY. The business has taken the decision not to reopen eight stores, but says that sales momentum is starting to build in the reopened stores, with sales down around -30% YoY (also ahead of expectations).

Unsurprisingly, the stores in retail parks, which are down by around -15%, are doing better than those in city centres (especially London, which is down around -40%).

Online business now accounts for more than 60% of sales, from 40% before the pandemic. Before the pandemic, the retailer believed that shops contributed around £6 of every £10 spent online, says Sharon, who believes that the figure nowadays is, on average, around £3. 

With the partnership’s new strategy taking shape, the early weeks of trading in H2 have been encouraging, says Sharon, who believes that the most likely full-year outcome will be a small loss or profit. Partners will receive no bonus until the business is on a stronger footing.

In John Lewis, the new Home collection has launched, and a bigger revamp for this key category is set for next spring.

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