Employee-owned retailer John Lewis Partnership has reported a half-year loss of of £25.9m, down from a profit of £0.8m last year.
Chairman Sir Charlie Mayfield said the UK retail map is being “re-drawn” and trading conditions remain difficult – and repeated his warnings in previous results that a no-deal Brexit would have a significant impact on the business.
Results at the Partnership’s grocery business Waitrose & Partners rose £14.1m to £110.1m, largely due to property profits this year, but also with an improvement in gross margins and a strong operational performance.
At John Lewis & Partners, operating losses rose £42.5m to £61.8m, reflecting lower sales in categories with more considered purchasing, cost inflation (including non-management pay) well ahead of the level of sales growth, and higher IT costs.
Profit before tax was £191.5m, up £185.5m.
Sir Charlie said: “We have historically made the majority of our profits in the second half of the year. Although we expect retail conditions to remain challenging, we are pressing on with key areas of innovation such as Waitrose Unpacked and the renewal of key ranges in areas like Menswear and Home.
“Over the next 12 months, we will also accelerate our transformation of the Partnership to deliver innovation faster and increase emphasis on the competitive difference of Partners.
“However, should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate that impact. In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness.
“However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”
In his statement Sir Charlie, who stands down as chair next year, saluted his replacement, Sharon White will be the sixth chair of the John Lewis Partnership.
He said: “She is an inspirational leader with the skills to take the Partnership forward and will take up her position in early 2020.”
