The Independent

John Lewis to cut jobs and bonuses after £234m loss


The John Lewis Partnershi­p has warned of job cuts and is scrapping staff bonuses for only the second time in its history after losses rose to £234m in a “very tough year”.

Chairperso­n Dame Sharon White said the struggling retail cooperativ­e, which runs the department store chain and Waitrose supermarke­ts, would need to cut costs aggressive­ly to

turn around its financial performanc­e. “As we need to become more efficient and productive, that will have an impact on our number of partners,” she told partners in a letter. That’s a massive regret to me personally.”

Inflation was the main reason, she said, while Waitrose in particular was hit by non-Brexit-related supply chain problems and a fire at a warehouse in Milton Keynes. No details have yet been given on job cuts; the 159-year-old group is in the middle of a five-year recovery plan and this week appointed Nish Kankiwala as its first ever chief executive after the sudden departure of executive director Pippa Wicks earlier this year.

JLP recorded a £78m loss for the year to 28 January – slumping from a £181m profit the previous year – worsening to £234m once additional costs such as significan­t write-downs on retail properties were taken into account. Waitrose sales declined by 3 per cent to £7.3bn, while John Lewis recorded 0.2 per cent growth to £4.94bn.

JLP plans to triple its cost savings target from £300m to around £900m by January 2026 and said the savings are likely to include an extra £236m from “simplifica­tion”.

“You’ve been exceptiona­l in what has been another very tough year,” Ms White told partners. “Two years of pandemic and now a cost of living crisis. The mantra for the year is cost out, margins up and customer focus. Simplifyin­g the way we run Waitrose shops – less time on process, more time with customers. Investing in data and loyalty so we can give customers more of what they want.”

Previous simplifica­tion efforts included changes to its head office, which resulted in 1,500 jobs being cut by 2021.

Josh Holmes, senior consultant at Retail Economics, said: “These results are worse than expected, with both Waitrose and John Lewis seeing profits retrench as inflation sends costs spiralling. John Lewis has been underperfo­rming for some years now and regular shake-ups at management level have not helped. Bringing in a new CEO is the latest admission that the

turnaround plan is not on track, with significan­tly more work needed to put the business back on top.”

Renewed focus on customers could work if properly implemente­d, said George MacDonald, executive editor of Retail Week. “Proof will be in the pudding when costs are out of the way,” he said.

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 ?? (Getty) ?? The partnershi­p – which inc l udes Waitrose stores – p l ans to make £900m in cost savings
(Getty) The partnershi­p – which inc l udes Waitrose stores – p l ans to make £900m in cost savings

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