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UPDATE 2-Britain's John Lewis Partnership slumps to first-half loss, scraps staff bonus

Thu, 17th Sep 2020 08:16

* Operating profit at John Lewis falls 46%

* Partners will not get a bonus

* First-half loss of 55 mln stg
(Adds industry context)

By Kate Holton

LONDON, Sept 17 (Reuters) - The John Lewis Partnership
reported on Thursday a first-half loss of 55 million pounds ($71
million) and said the COVID-19 hit to trading had left it in the
same position as it was after World War Two - unable to pay
staff a bonus.

The owner of Britain's leading eponymous department store
and the upmarket Waitrose supermarket said the closure of stores
during the national lockdown and the purchase of low-profit
products like toilet paper had hit overall trading.

Operating profit at the department store fell by 46% in the
first-half to July 25. As a result, the employee-owned group
will not pay its staff, known as partners, a bonus.

"The Group found itself in a similar position in 1948 when
the bonus was halted following the Second World War," it said.
"We came through then to be even stronger than before and we
will do so again."

The coronavirus pandemic has destroyed many retail
businesses that were already struggling with high rents and
taxes, and forced changes in consumer behaviour in five months
that would normally take five years.

With online now accounting for 60% of John Lewis sales from
40% before the pandemic, the group has already said it must
diversify beyond retail if it is to survive the turmoil on
Britain's high streets.

The challenge falls to Sharon White, a former government
official and head of the media regulator Ofcom, who took charge
of the company earlier this year. She will set out more details
for her plans in October.

The company said that its worst case scenario as set out in
April for the full year of a sales fall of 5% in Waitrose and
35% in John Lewis remained its view. However, it now believes
the most likely outcome will be a small loss or a small profit
for the year.

($1 = 0.7717 pounds)
(Reporting by Kate Holton; editing by James Davey and Emelia
Sithole-Matarise)

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