John Lewis announces 99 per cent slump in half-year profits

John Lewis boss pleas for ‘cool heads’ as he insists ‘department store isn’t dead’ despite announcing 99 per cent slump in half-year profits

John Lewis Partnership reveals pre-tax profits have slumped by 99 per cent
In the first six months of this year profits amounted to just £1.2million
They put the plunge down to not bringing in price hikes to adjust for inflation
Chairman Sir Charlie Mayfield said Brexit has helped create ‘uncertain’ economy
But he said ‘department store is not dead’ and ‘cooler heads are needed’

By Joseph Curtis For Mailonline

Published: 07:18 BST, 13 September 2018 | Updated: 07:52 BST, 13 September 2018

John Lewis has reported a 99 per cent plunge in underlying pre-tax profits to £1.2 million for the six months to July 28 as its chairman blamed a ‘challenging time for retail’ which has been ‘created in part by Brexit’.

The John Lewis Partnership, which includes the department store and Waitrose supermarket among its brands, also said statutory half-year profits slumped 80.5 per cent to £6 million.

It warned that it continues to expect profits in the new financial year to be ‘substantially lower’.

The group said that profits at the department store chain have continued to be hit by moves not to pass on price hikes to consumers from higher inflation, as well as the cost of new stores and IT changes.

But speaking to BBC Radio 4, chairman Sir Charlie Mayfield said: ‘There’s uncertainty from every direction right now but the department store isn’t dead. We need cool heads and will continue to focus on the customer.’

John Lewis has revealed its pre-tax profits for the first six months of the year fell by 99 per cent to just £1.2million

John Lewis has revealed its pre-tax profits for the first six months of the year fell by 99 per cent to just £1.2million

Sir Charlie added: ‘These are challenging times in retail.’

He added: ‘Profits before exceptionals are always lower and more volatile in the first half than the second half.

‘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 almost a decade.

‘With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole.’