Thursday 12 September 2019 9:02 am

John Lewis swings to a loss and flags no-deal Brexit fears

Troubled high street chain John Lewis reported its first-ever half-year loss this morning, striking a gloomy tone amid fears of a no-deal Brexit.

The retail giant, which owns both John Lewis department stores and Waitrose, warned that leaving the European Union without a deal would have a “significant” impact on the group.

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Swinging to a loss in the first six months of the year, the firm blamed falling sales and higher costs for a challenging six months.

The results

Losses plunged to £25.9m during the 26 weeks to the end of July, falling from an underlying pre-tax profit of £0.8m during the same period in the previous year.

Revenues fell 1.4 per cent from £4.8bn to 4.7bn.

Total net debts have reduced by £469.2m compared to July 2018.

What the group said

Sir Charlie Mayfield, who is making way for Sharon White to succeed him as chairman next year, said: “We have historically made the majority of our profits in the second half of the year. Although we expect retail conditions to remain challenging, we are pressing on with key areas of innovation such as Waitrose Unpacked and the renewal of key ranges in areas like Menswear and Home.”

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He added: “However, should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate that impact. In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness. However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.