Jun 27, 2018

John Lewis warns half-year profits will be ‘close to zero’

The John Lewis Partnership said half-year profits will be "Close to zero" and that the outcome for the full year will be substantially less than last year amid heavy investment in service and IT to differentiate itself from other High Street retailers. The partnership, which operates the eponymous department stores and the Waitrose grocery chain, said it plans to raise up to £500m by "Rebuilding profitability" at Waitrose, releasing value from property and reviewing the pension scheme. "This will allow us to maintain investment at the rate of £400-500m a year," it said in a statement. "For the full year there are a wide range of possible outcomes, given the market uncertainty, but we are currently assuming that profits before exceptional items will be substantially lower than last year. The Partnership currently expects to see profit growth in Waitrose, a decline in John Lewis and significant extra costs at the Partnership level as a result of greater IT investment, which will be a big driver behind the overall profit change," the company said. Underlining its points of difference compared with other retailers, the company plans to rebrand its two chains as "John Lewis and Partners" along with "Waitrose and Partners."

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