Sep 13, 2018

John Lewis is down but not out

News of a 99 per cent fall in John Lewis's profit feels like an attack on the fabric of society. Half-year pre-tax profit certainly seemed to expire, declining from £96.5m to just £1.4m. John Lewis's department stores fell to a loss for the first time in recent memory. Before anyone orders 3 metres of black silk crepe, lights a John Lewis & Partners Sandalwood Scented Candle, and calls for a period of national mourning, it is worth noting that this is not some kind of death spiral. Unlike Debenhams, House of Fraser and other cadaverous store chains, John Lewis is continuing to grow both its sales and customer numbers, and its balance sheet is strengthening. Margins have been hit by the great contradiction in John Lewis's business model: a supposedly premium retail offering combined with a "Never knowingly undersold" price-matching guarantee.

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