John Lewis has posted losses of more than £500m and warned that worse is to come – but it has postponed an expected announcement on store closures for a few weeks.
In what it described as “one of the most challenging in the Partnership’s history”, preliminary results for the group for the year ending January 30 show a loss before tax of £517m.
The losses were attributed mostly to a write-down in values for its stores as the retail market shifted online.
But a rumoured announcement of up to eight store closures did not materialise, though it is now expected by the end of this month.
The group, which also owns upmarket grocery chain Waitrose, said it does not expect all its John Lewis shops to reopen at the end of lockdown. It did not say how many of its 42 John Lewis shops are under threat.
The company said: “Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store.
“Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain. We are currently in discussions with landlords and final decisions are expected by the end of March.
“Closing a store is one of the hardest decisions we can make as a Partnership. We are acutely sensitive to the impact on our Partners, customers and communities, particularly at a time when retail and our high streets are undergoing major structural change.
“We will do everything we can to lessen the impact and will continue to provide community funds to support local areas.”
John Lewis said the various local and national lockdowns had accelerated a shift towards online shopping, with online sales up from 40% of group revenues to three-quarters.
It said it benefitted from £190m of Government support, made up of business rates relief and furlough. Its “current intention” is to accept the business rates relief made available from April to June, it said.
The company said it would invest £800m in its turnaround this year but this would lead to worsening results in 2021/22 before improvements after that.
Having cancelled its staff bonus for the first time in decades, it said that it would be restored when profitability returned above £150m.