John Lewis expects to close unprofitable stores after lockdown
- Credit: SARAH LUCY BROWN
The owner of John Lewis stores has warned of more department store closures after the company plunged to its first ever annual loss.
The John Lewis Partnership — which also owns grocery chain Waitrose — said it didn’t expect all its John Lewis outlets to reopen after lockdown ends.
The company did not reveal how many of its 42 John Lewis stores — which includes a John Lewis and Waitrose outlet at Futura Park in Ipswich — are under threat. It said it was in talks with landlords and would make a final decision in March.
Reports suggest another eight stores might be at risk — on top of eight announced in July.
The business, which dates back to 1864, scrapped its staff bonus for the first time since 1953 after plunging to a £517m pre-tax loss for the year to January 30 following profits of £146m the previous year.
Chairman Sharon White said: “There is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store.
“Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain.
“We are currently in discussions with landlords and final decisions are expected by the end of March.
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“We will do everything we can to lessen the impact and will continue to provide community funds to support local areas.”
The announcement spells more pain for John Lewis workers, 1,300 of whom were affected by store closures last summer, but a groups spokesman said they would always try to redeploy staff elsewhere, with redundancy a last resort.
The company said it hopes to be back to profit in 2022-23, making £200m next year and £400m by 2025-26. It has received £190m in government emergency support such as furlough and business rates relieve.
“The coming year is a crucial one in our five-year turnaround of the partnership as we set ourselves back on the path of sustainable profit,” it said.
The loss over the past year follows massive writedowns on the value of its shops due to the coronavirus crisis, which has laid waste to high streets and shifted sales online.
A spokeswoman said: "We're currently in discussions with relevant landlords nationally and final proposals are expected by the end of March."
The group closed its Waitrose convenience shop at the Ipswich Corn Exchange in December with the majority of staff redeployed to other stores.