John Lewis Partnership profits climb 60% in first half

Group revenue rose 8.6% to £3.9bn while group pre-tax profit increased 59.8% to £144.5m in the half year to July 28.

Like-for-like sales rose 9.2% at the department store, which recorded a 12.9% increase in sales to £1.3bn. Operating profit rose 188.6% to £29.8m while online sales grew 43.1% to £375.8m.

John Lewis said “significant” market share increases in home technology, fashion and homewares had complemented strong online growth to drive sales.

The retailer has benefited from a multichannel approach. Online sales now account for 24% of total John Lewis sales and its click-and-collect service has grown by 114% year on year, with purchases collected at Waitrose outlets accounting for 34% of sales.

John Lewis managing director Andy Street said the department store will aim to open more pop up shops after it debuted a temporary store in Exeter last month. As revealed by Retail-Week.com, the retailer opened the pop up ahead of its department store opening next month, as a way to introduce the people of Exeter to the John Lewis brand.

Street said the retailer is planning to open another pop up shop ahead of its department store opening in York next year. “It’s really exciting. The early signs are really good and we expect to do the same in York next year,” said Street.

Waitrose recorded a 6.6% increase in sales to £2.6bn while profits rose 28.9% to £142m. Like-for-likes climbed 2.2%.

The grocer opened four new supermarkets and six Little Waitrose convenience stores in the half, bringing the total estate to 282 shops, including 34 convenience shops, at the end of July.

John Lewis Partnership chairman Charlie Mayfield said the group’s performance had benefited significantly from the Diamond Jubilee, the lead-up to the Olympics and Paralympics and the anniversary of the VAT increase, which depressed sales last year.

He said investment in multichannel across the group and extending the Brand Price Match against Tesco at Waitrose had paid off.

Waitrose invested £79.9m in new branches and its supply chain in the past year, while John Lewis spent £67m on opening new space, refurbishment and IT systems.

He said: “We saw an acceleration in sales and profit from the longstanding focus we have had on developing our multichannel operations and from improving the efficiency of our business. Multichannel sales made a vital contribution across both John Lewis and Waitrose.

“We also saw the benefits of changes made in the branch operations in both Waitrose and John Lewis, and an increasing contribution to greater efficiency from our Partnership Services division.”

He added: “Our rate of growth will remain positive but will be slower in the second half and, with further investment planned in that period to strengthen our business for the longer term, the rapid rate of profit increase is not expected to be carried through to the full year. This is consistent with our long-term commitment to building the partnership for the future.”