Retailer John Lewis to pay out its lowest bonus since 1953
RETAIL GIANT John Lewis Partnership has said it will pay out its lowest staff bonus since 1953 as it revealed a 23 per cent profits plunge and store closure plans.
The group said it is cutting its staff bonus for the seventh year running, to 2 per cent of annual salary, after seeing underlying pre-tax profits tumble to £123m for the year to January 25.
New chairwoman Dame Sharon White, inset, – who took the helm at the group behind John Lewis department stores and Waitrose supermarkets last month – outlined a plan to return the group to profit growth, including “right sizing” its store estate and slimming down its head office.
She also hinted that the retailer’s long-time slogan “Never Knowingly Undersold” price match could be “modernising” as it struggles to compete on price with online giants and discount events at rivals.
The new chief explained: “We’ve had fair value as part of our proposition for almost 100 years and fair value will continue to be part of our proposition going forward, whether that’s in a more modernised form or not.”
The group also announced that three Waitrose stores will close later this year – at Helensburgh in Scotland, Four Oaks in the West Midlands, and Waterlooville near Portsmouth – as part of the overhaul. Dame Sharon said: “We need to reverse our profit decline and return to growth so that we can invest more in our customers and in our partners. “This will require a transformation in how we operate as a partnership and could take three to five years to show results.
“We are stepping into a vital new phase for the partnership and I have no doubt we will come through it stronger.”
Dame Sharon, the former chief of communications watchdog Ofcom, said staff affected by store closures who wish to stay with the group will be “actively supported” to do so.
But there was some cheer as she unveiled plans to invest in Waitrose online, ahead of its tieup with Ocado ending in September, with plans to hire 2,400 new staff and build a new fulfilment centre in Enfield, north London.
Her strategic review will be completed by the autumn.