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John Lewis Partnership has warned it is “not out of the crisis” in the retail sector caused by the Covid-19 pandemic and will not be reopening some stores when lockdown ends, after slumping to a £517m loss for 2020.
The group, which also owns Waitrose, confirmed it would not be paying a bonus to staff for the first time in 67 years.
John Lewis also forecast that its financial results for 2021 would be even worse, due to investment in its online shopping service and other measures in its turnaround plan.
The staff-owned business’s first-ever full-year loss comes after £648m of one-off costs relating to the writedown in value of John Lewis shops amid the shift to online shopping, as well as restructuring and redundancy costs from store closures and head office reorganisation.
Chairman Sharon White said the group would be holding on to government business rates relief and furlough support worth £190m which had “helped to keep us running and avoid more severe restructuring”. White said the group intended to continue claiming business rates relief until June.
The group confirmed some of its stores would not be reopening when lockdown measures are lifted in April.
The group is in discussions with landlords about the future of some shops and final decisions are expected by the end of March.
White said: “Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store.
“We are not out of the crisis yet and the economic environment remains extremely uncertain.”
Before the one-off writedowns, profits rose to £131m in the year to 30 January from £70m a year before, underpinned by the business rates support.
The group plans to invest £800m in 2021-22 to support its turnaround plans, including improving its online shopping infrastructure.
White said this would mean that John Lewis’s next set of full-year financial results – including its cash levels and profit before exceptionals – would be worse, before improving the following year.
Source: The Guardian
Keyword: John Lewis may not reopen some stores as group slumps to £517m loss | John Lewis