John Lewis Partnership this morning reported a sharp increase in group profits, tripling from £43 million ($52.5 million) to £126 million ($157.5 million).
On the surface, this marks a significant milestone as the company’s ongoing turnaround gathers momentum. However, the numbers also highlight the distance left to go as the retailer works towards its ambitious 2025 profit target.
Launched in October 2020, the “Partnership Plan” set a goal of achieving £400 million ($500 million) in profits by 2025.
The ensuing three years, however, were perhaps the nadir for the Partnership, as like all retailers, it needed to navigate its way through the Covid pandemic and in the process became loss-making with the fabled staff bonus becoming a casualty.
However, the appointment of a new leadership team, the return of “Never Knowingly Undersold”, new product ranges, and a greater focus on customer service have seen something of a turnaround in fortunes at the department store.
And whilst the staff bonus has not been paid for the third year running—offset by a £114 million ($142.5 million) investment in Partner pay—that appears more of a reflection of the prudent approach to managing the business which is being adopted, rather than a blow for the Partners who can now see real progress being made.
Recently installed chair, Jason Tarry, said that the Partnership “has the right plan focused on retail”, and it certainly feels like the business is back to being run by retailers.
But despite the bullish sentiment, both John Lewis and Waitrose continue to punch below their weight, and this is clearly recognized by the current leadership team.
Waitrose boss, James Bailey saying today that for the supermarket chain, “the best is yet to come”, and according to Tarry, there is “headroom in both brands and a customer appetite to do more”.
A planned £600 million ($750 million) investment across both brands is a testament to this. And whilst peripheral activities such as building affordable housing remain, the focus is clearly well and truly back to where it belongs; retail.