John Lewis Partnership faces ‘laborious selections’ as retailer prepares to unveil half-year loss
The John Lewis Partnership faces ‘laborious selections’ as the retailer prepares to unveil a half-year loss.
Analysts expect a bleak set of outcomes on Thursday, with the retail group forecast to reveal it has swung into the purple in the course of the six months to the tip of July.
One analyst predicted the partnership can be left nursing a loss of £15m. That can be even worse than final yr, when it shocked the business by revealing it had made simply £1m revenue.
Challenge: The outcomes are set to additional underline the stark challenges dealing with Sharon White (pictured), who takes over subsequent yr
The John Lewis Partnership, which runs its namesake shops as nicely as the Waitrose grocery store chain, has been laid low partly due to brutal competitors.
Struggling division retailer rivals such as House Of Fraser and Debenhams have been closely discounting this yr, forcing John Lewis to comply with swimsuit, whereas Waitrose has seen gross sales slide as supermarkets really feel the squeeze from rebel German rivals Aldi and Lidl.
Last month, analysis consultancy Kantar warned that each Waitrose’s gross sales and its market share had been shrinking.
The outcomes this week are set to additional underline the stark challenges dealing with Sharon White, the present boss of media regulator Ofcom who takes over from outgoing John Lewis Partnership chairman Sir Charlie Mayfield subsequent yr.
Richard Hyman, an unbiased retail analyst, stated the partnership confronted ‘unprecedented aggressive stress’ and that White, 52, would ‘inevitably’ have to grapple with additional cuts to its portfolio of some 400 retailers.
Waitrose stated in July that it deliberate to shut three shops and promote one other 4. And John Lewis, which is run by managing director Paula Nickolds, confirmed in January it was set to shut a division retailer for the primary time in 13 years.
Hyman added: ‘John Lewis will quickly be bringing in additional than half of its gross sales from on-line, and but it has nonetheless been opening shops. It wants fewer shops, no more, so there are going to be some laborious selections for Sharon White to make. Frankly, it is inevitable there will probably be extra closures.
‘The overwhelming majority of UK retailers have nonetheless obtained far too many shops, and John Lewis isn’t any exception.
‘What White might discover, although, is that one of many issues that makes the John Lewis Partnership robust – its democratic tradition – might generally be a weak point.
‘They want to improve the tempo of decision-making – there’s a nice want proper now within the business to have the ability to transfer sooner than ever earlier than.’
Fellow retail analyst Nick Bubb, who predicted that the John Lewis Partnership would put up a first-half loss of £15m, advised The Mail on Sunday that one silver lining was earnings at Waitrose might have ‘held up fairly nicely’.
A spokesman for the John Lewis Partnership declined to remark final night time.