Fashion shines for John Lewis but retailer remains loss-making

John Lewis remains under intense scrutiny as it works to recover from a bruising period of weaker results. And on Thursday, its half-year figures for the period to July showed that it’s not there yet.

However, while the company is still loss-making, those losses narrowed in the latest period, although it admitted that its turnaround will take longer than originally planned due to inflation.

So what are the numbers? Losses before tax and exceptional items fell from £66.8 million to £57.3 million. That’s a 14% improvement at the business that’s owned by its staff. And losses before tax narrowed by 41% from £99.2 million to £59 million.

Sales topped £5.8 billion in the half, up 2% year-on-year and it attracted 600,000 new customers to reach 21.4 million people.

It’s interesting that the company said customers “are spending more on themselves (beauty, fashion and dining in) but holding back on technology and big-ticket home items”.

It operates major supermarket Waitrose and said trading operating profit there improved from £431.7 million to £504.4 million. But at its department stores chain John Lewis, trading operating profit fell back from £295 million to £277.1 million. That’s bad news not just for the company but for the overall state of the British department stores sector.

And as mentioned, it said that “owing to inflationary pressures, the turnaround strategy dubbed Partnership Plan will take two additional years to deliver, coming in 2027/28 rather than 2025/26”.

It added that the economic outlook is uncertain, but an improvement in full-year financial results expected.

MORE FASHION LESS TECH

Looking at the John Lewis operation specifically, sales were £2.1 billion, down 2%. Yet fashion was up 3% and beauty was up 2% — partly driven by 50 new brands. The second half will see further launches, including Vivere, an exclusive with Savannah Miller. 

As mentioned, other major purchases such as home and tech (down 5% and 4%, respectively), were less of a priority for shoppers. John Lewis said it’s “been a case of ‘more loafers and fewer sofas’.” 

The balance between store and online purchases remained broadly unchanged at 43% and 57%, respectively. That said, shop sales improved by 2% driven by increased footfall while online declined 4% owing to weaker conversion. 

“Customers were drawn to shops for personal styling appointments (up 27%), beauty services (up 23%) and nursery consultations (up 17%),” it explained.