Profits fall by almost a quarter at John Lewis Partnership as staff get lowest bonus for 60 years
By James Young | 5th March 2020
Partners at John Lewis will receive their lowest bonus since the 1950s as the retail giant posted a 23 per cent slump in profits.
John Lewis Partnership released their unaudited results for the year ended January 25 2020 this morning.
In a letter to the company's employees - known always as partners due to each effectively having a stake in the business - new chair Dame Sharon White said profits were down by almost a quarter.
She said: "With the hard work of Partners, we made £123m of profit in 2019/20, which is 23 per cent less than we made in 2018/19.
"This is a weaker performance than we had hoped for, driven by significantly reduced profitability in John Lewis.
"Profits in 2019/20 were at the lower end of what we had forecast.
"We are, therefore, awarding a bonus this year of 2 per cent.
"I believe this is prudent and affordable and it recognises the contribution made by Partners working in the business today without creating risk for our future sustainability."
Gross sales across the group in 2019/20 came in at £11.545billion, a 1.5 per cent decrease on the same time last year.
Waitrose contributed £6.760billion of that total, 1.1 per cent down, while John Lewis sales were 2.1 per cent down at £4.784billion.
Like for like sales at both of the store groups fell, with Waitrose reporting a 0.2 per cent drop while John Lewis recorded a 1.8 per cent fall.
Dame White added: "We are the largest employee-owned business in the UK and amongst the largest in the world.
"We are to all intents and purposes a social enterprise; the profits that we make are reinvested into the business - for our customers and our Partners.
"Our constitution requires us to make sufficient profit to keep the Partnership going, not the highest amount possible, and to put our customers and our Partners ahead of profit.
"Throughout 2019 Partners right across the business have shown incredible passion for and commitment to our customers, and continue to do so.
"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."
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