John Lewis today confirmed it will not pay a staff bonus for the first time in more than 70 years as the department store chain posted a pre-tax loss of £635m in the first half.
The retailer reported a 2.7 per cent uptick in revenue to £4.9bn over the period, but said shoppers had spent more money on less profitable products such as laptops and loo roll.
The upmarket department store has suffered from store closures and a sharp decline in footfall sparked by the coronavirus outbreak.
The company estimated closures had cost it £200m in lost sales, while it also booked £50m in Covid-19 costs such as protective equipment.
John Lewis also said it had suffered a £470m impairment on the value of its brick-and-mortar stores after its online presence grew to account for 60 per cent of total sales.
This pushed the retailer to a pre-tax loss of £635m, compared to a profit of £192m in the same period last year.
John Lewis confirmed it would not pay a bonus to staff, marking the first time the company has scrapped its payout since 1948 in the aftermath of the Second World War.
Chief executive Sharon White said the company expected to resume the bonus once profit hit £150m and debt ratio fell below four times.
Yesterday it emerged the retailer is preparing to slash the size of its flagship Oxford Street store by up to 40 per cent due to a steep decline in West End footfall.
The group’s Waitrose supermarkets recorded a 10 per cent rise in like-for-like sales over the period as Brits stocked up during the coronavirus lockdown.
The company reported increased demand since it cut ties with Ocado at the beginning of the month and said it planned to boost online capacity by roughly 50 per cent to 250,000 orders per week.
Waitrose has also entered into a trial partnership with Deliveroo, offering 30-minute delivery to up to 500,000 customers.
The supermarket chain yesterday said it would close four unprofitable stores, putting 124 jobs at risk.
John Lewis warned the outlook for the rest of the year remained uncertain, noting that Christmas trade was crucial to the group.
Boss White said she expected a small loss or profit for the year and said the company was pushing ahead with head office job cuts in a bid to slash £100m in costs.