John Lewis announces profit slump of 99%

Irving Hamilton
September 13, 2018

Dominic Raab, the Brexit secretary, provoked a new row with business chiefs today by accusing John Lewis of evading responsibility for plunging profits by blaming Brexit.

The employee-owned group, which has rebranded its department stores John Lewis & Partners and its supermarkets Waitrose & Partners, reported a 99 percent slump in first-half profit before exceptional to 1.4 million pounds, hit by its pledge to match prices and lower sales of big-ticket home items.

Profit at John Lewis's 50 department stores and home shops was squeezed by its "Never Knowingly Undersold" promise as other retailers discounted heavily and a decision not to pass on all the cost inflation from a weaker pound, it said.

John Lewis Partnership chairman Sir Charlie Mayfield said: "These are challenging times in retail".

Speaking to the BBC, he said: 'I think there will be some temptation from businesses that are not doing so well to blame Brexit and I think that is a mistake'.

'I'm not going to get into some sort of ding-dong with the secretary of state for all things European Union'.

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Sir Charlie confirmed the company would be investing £400 million to £500 million a year despite the problems it faced.

"It is especially so this half year, driven mainly by John Lewis & Partners where gross margin has been squeezed in what has been the most promotional market we've seen in nearly a decade".

"This will take a lot of hard work from all of our partners, but we are confident in our commitment, drive and ability to deliver the partnership's strategy", he said.

"The simple truth is that times like these call for cool heads and really determined ambition".

The Government is now hard at work trying to strike a Brexit deal with the European Union.

The John Lewis Partnership reiterated warnings it continued to expect profits in the full 2018-19 financial year to be "substantially lower".

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