John Lewis must ‘up its game’ as profits slump
JOHN Lewis is on track to deliver a profit slump after the exit of its department store boss and dismal trading figures, City sources say.
The department store is set to report just £30 million profit in the year to the end of January before any bonus is handed to staff. That would be a quarter of the profit reported last year, according to retail analyst Nick Bubb. He said the fall at the retailer, which has a £4 billion-a-year turnover, would mean the group bonus would be ‘mostly blown away’.
John Lewis’s sister chain Waitrose, which made an operating profit of £200 million last year, is expected to deliver a more ‘solid’ performance, Bubb added.
However, another analyst, Richard Hyman, said the departure of department store boss Paula Nickolds, Waitrose managing director Rob Collins and chairman Sir Charlie Mayfield to make way for his replacement Sharon White, a former chief executive at Ofcom, leaves a power vacuum at the firm.
‘John Lewis Partnership faces the most challenging moment in its history. The incoming leader, by definition the most senior executive in the company, has no commercial background at all, let alone a retail one. She would and should have relied on Collins and Nickolds to accelerate her learning about the business and the industry.
‘The clock is ticking. It is clear that in 2020 trading will be further squeezed. Farreaching decisions need to be made now and they must be right. Retail is unforgiving. No brand is owed a living. The partnership needs to up its game, and quick.’