John Lewis Brexit bust-up with Raab
As its profits plummet by 99%, minister accuses chain of using Britain’s departure as an excuse
JOHN Lewis was locked in a battle with the Brexit Secretary last night after the firm appeared to blame the UK’s departure from the EU for a dramatic slump in profits.
The group, which also owns Waitrose, reported a 99 per cent plunge in half-year profits to just £1.2million – underlining the crisis engulfing the high street.
John Lewis chairman Sir Charlie Mayfield said one factor behind the dismal results was public uncertainty over Britain’s future once it leaves the European Union.
But Brexit Secretary Dominic Raab hit back, saying it was wrong for ‘businesses that aren’t doing so well to blame Brexit’.
He added: ‘I don’t doubt that some of the uncertainty around these negotiations will have an impact on business – that’s why we are putting all our energy into getting the good deal we want.
‘All I am just gently saying is that it’s rather easy for a business to blame Brexit and the politicians rather than take responsibility for their own situation.’
It prompted a further response from Sir Charlie, who said he did not mean ‘to get into some sort of ding-dong’ with Mr Raab and that he was simply pointing out that the pound was weaker – making it more
‘Blaming anyone but themselves’
expensive to import goods. However, the debate sparked a furious response among both Remainers and Brexiteers.
Eurosceptic Conservative MP Sir Bernard Jenkin said: ‘People who are having difficulties with their retail businesses will blame all sorts of things rather than themselves for their problems … we’ve just seen House of Fraser go bust. This is not because of Brexit, it’s because of the nature of retail across the whole world.’
But Tory MP Nicky Morgan, chairman of the Commons Treasury committee, said: ‘If respected businesses such as John Lewis say that the fall in sterling is a problem, we should listen to them.’
Allie Renison, of the Institute of Directors, added: ‘There is no doubt the uncertainty around our future trading relationship with Europe will inevitably be having an impact on some firms … these companies are well within their rights to raise concerns.’
Sir Charlie’s comments came after John Lewis announced its profits had plunged to £1.2million for the half-year to July 28, down from £83million in 2017. Waitrose posted a £94.4million profit – a 7.2 per cent rise on the year before. Julie Palmer, partner at law firm Begbies Traynor, said John Lewis’s plunge in profits underlined the crisis on Britain’s high streets.
Experts criticised John Lewis’s ‘never knowingly undersold’ prom- ise for wrecking its profitability. The price pledge says that if a customer finds a product cheaper elsewhere, it will match the price.
Retail expert Steve Dresser said: ‘Never knowingly undersold needs refining, badly.’ It comes after the group had the biggest revamp in its 154-year history.
The multi-million pound campaign included adding ‘& Partners’ to its logo, and a flashy TV advert. Retail veteran Bill Grimsey, a former boss of Iceland and Wickes, said: ‘ There should be some very red-faced top bosses given they have just wasted loads of money on a pointless advert.
‘It is personal for the partners on the shop floor and they deserve better from the leadership.’