(Bloomberg) -- John Lewis Partnership Plc narrowed losses as sales recovered at its upmarket grocery chain Waitrose, in the last set of results before Sharon White hands over the reins to a new chairman.
The partnership, which runs John Lewis department stores as well as Waitrose, reported a first-half loss of £30 million ($39 million), down from £59 million a year earlier. It said Waitrose, which has been fighting to move on from an IT glitch that left it with empty shelves in stores, has recovered sales and volume.
The improved picture comes as Jason Tarry, the former head of UK and Ireland for Tesco Plc, prepares to take over as chairman of the employee-owned group next week. He replaces White, who ran the telecommunications regulator Ofcom before taking on the John Lewis role in 2020.
The partnership typically makes most of its money in the second half of the year, when sales are buoyed by Christmas spending. However, the ongoing losses show how far the retailer has to go with its turnaround plan, which has been under way since White took over.
John Lewis stores are still struggling with sales down 3% in the first half, which it blamed on a tough environment for general merchandise. Fashion struggled due to a squeeze on consumer spending and poor weather over the British summer. There was also lower demand for big ticket items, although cookware increased and technology benefited from sales of smart wearables such as the Oura ring, it said.
Adjusted operating profit at John Lewis stores fell by £24 million.
Still, the John Lewis Partnership — a long-time favorite of England’s middle classes — said it expects to deliver a significantly higher full-year profit than the £42 million it reported for the previous year. “We are making really good progress,” said Nish Kankiwala, chief executive officer, during a management call with journalists. Kankiwala said that a decision would be made in March about whether to pay employees a partnership bonus.
JLP said Thursday that Waitrose sales rose by 5% with volumes up 2%, thanks to new partnerships including with the chef Yotam Ottolenghi and the health app Zoe. Waitrose plans to open as many as 100 new convenience stores over the next five years, and to refurbish some of its existing shops. It has 4.6% of the UK grocery market according to research firm Kantar.
Andy Mounsey, interim executive director for finance, confirmed the partnership’s profit target of £400 million by 2027/28. “Our plan is on track,” he said during the call.
(Updates with detail from a call with management. A previous version corrected the pretax loss number for the prior year in second paragraph.)
©2024 Bloomberg L.P.
