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* Reports first half loss of 635 mln stg
* Books exceptional charges of 580 mln stg
* Axes annual staff bonus
* To detail strategic review next month
(Adds detail, chairman's comments)
By Kate Holton and James Davey
LONDON, Sept 17 (Reuters) - Britain's John Lewis Partnership
vowed to bounce back from the COVID crisis, even as it plunged
deeper into the red, wrote down the value of its stores by 470
million pounds ($605 million) and scrapped its annual staff
bonus for the first time since 1953.
Sharon White, chairman of the department stores and
supermarkets group, told reporters on Thursday that staff - or
partners as the group calls them - should not expect a bonus
next year either, but that the business would survive.
"The Partnership found itself in a similar position in 1948
when the bonus was halted (for five years) following the Second
World War. We came through then to be even stronger than before
and we will do so again," she said.
The COVID-19 pandemic has destroyed many retailers in
Britain that were already struggling with high rents and taxes.
The partnership made a first-half loss of 635 million pounds.
The impairment charge reflects a rapid change in consumer
behaviour during the pandemic, which has accelerated a shift
away from shopping in stores to buying online.
Excluding total exceptional items of 580 million pounds, the
employee-owned group made a first-half loss of 55 million
pounds, similar to last year.
The temporary closure of stores during a national lockdown
and shoppers' focus on low-profit essentials, such as toilet
paper, hit overall trading.
Operating profit fell 46.3% at John Lewis department stores
in the six months to July 25, but was up 10.6% at Waitrose
supermarkets.
With online sales now accounting for 60% of the department
store total, from 40% before the crisis, the partnership has
already said it must diversify beyond retail to survive.
The challenge falls to White, a former head of media
regulator Ofcom, who took charge earlier this year. She will set
out the results of her strategic review next month.
The group is keen to bring in partners who share its ethos
and Waitrose recently teamed up with food delivery firm
Deliveroo, having ended ties with Ocado.
"We've also made it very clear that ... a red line for us
within our strategic review is we're not going to be selling
either brand," White said.
The group is sticking with a worst case scenario - set out
in April - under which full-year sales would fall 5% at Waitrose
and 35% at John Lewis. It believes the most likely outcome will
be a small loss or a small profit for the year.
($1 = 0.7771 pounds)
(Reporting by Kate Holton and James Davey; editing by Emelia
Sithole-Matarise and Mark Potter)
