Sep 13, 2018

John Lewis profits collapse 99% in first half

UK retail stalwart John Lewis has reported a 99 per cent fall in half-year profits and warned margins are under pressure from the fiercest discounting across the sector in a decade. Reported pre-tax profits fell 81 per cent to £6m, despite gross sales climbing 1.6 per cent to £5.5bn. At John Lewis department stores there was an operating loss of £19.3m before exceptionals, with same-store sales down 1.2 per cent. Matching competitors' prices because of the John Lewis "Never knowingly undersold" promise cost it roughly £40m of foregone profit in the first half. John Lewis reiterated that full-year profits will be substantially lower than last year. The steep drop in profit at John Lewis comes as department stores are squeezed by online competition, a surfeit of space and rising rents and staff costs.

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