John Lewis said it will permanently close more stores this year as it posted a loss of £517m due to soaring Covid-related costs.
The partnership’s boss Sharon White this morning said it does not expect to reopen all of its John Lewis shops at the end of lockdown, as she revealed that coronavirus costs reached £648m last year.
It’s thought around 10 sites will never reopen their doors.
The retailer is in discussions with landlords and final decisions are expected at the end of this month.
“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” White said in a statement.
Store closures will occur in places “where customers aren’t” executive director Pippa Wicksadded.
“It’s not about whether it’s a high street or a shopping center or an out-of-town retail park, it’s about where our customers are living and working. That’s what’s driving our decision making,” she said.
The exceptional costs of £648m were mainly due to the write down in the value of John Lewis shops, as well as restructuring and redundancy costs from previously announced store closures and changes to its head office.
The value of John Lewis stores have fallen to almost half the value they were before this year’s and last year’s write downs, due to the shift to online shopping during the pandemic.
Profit before exceptional items was £131m, but the department store chain would have posted a loss if not for the Covid crisis-related support from the government.
The retailer will not pay a staff bonus for the second time in 67 years after scrapping the employee payout in September last year.
It will resume its bonus scheme when profits before exceptional items reach £150m “on a sustainable basis” and its debt ratio is below four times.
John Lewis said it is committed to paying the voluntary real living wage when profits rise to £200m.