Category up 117% as department store chain hits highest sales yet at £4.93bn
A 117% rise in John Lewis’ greeting card sales has contributed towards the retailer’s decision to reinstate its annual bonus for partners, promising them 3% plus a 2% pay rise.
Profits before tax, bonus, and exceptional items (PBTBE) rose 38% across the business, the company revealed on Thursday 10 March, in its unaudited results for the year ending January 29, 2022, which also showed the department store chain achieved its highest sales yet at £4.93biillion, up 8% like-for-like on last year.
In a letter to partners, John Lewis Partnership chairman Dame Sharon White thanked them for their “commitment and dedication in what has been another tough year”, and added that “against two years ago, John Lewis sales were up 10% like-for-like” despite having fewer stores and lockdown forcing the closure of all its bricks-and-mortar outlets for 10 weeks of the year.
Claire Taylor, the retailer’s buyer for greeting cards, stationery and gift collections, told PG Buzz: “We are really pleased with the results. Our current trading patterns are also strong with cards, up 117% versus last year, demonstrating the critical role our shops play in driving our trade as they were closed this time last year in lockdown.”
Claire also revealed how the department store group’s card sales have bounced back magnificently, trouncing even pre-pandemic levels.
“The even stronger story is that the category is up vs 2019 trading in our like-for-like branches which shows that the demand is still there, and footfall continues to improve as we return to a more normal retail pattern post the pandemic,” she explained.
Once exceptionals are taken into account, John Lewis Partnerships made a pre-tax loss of £26million, a dramatic improvement on its £517m loss the previous year, when it faced a big write-down in the value of its John Lewis stores.
Having met the board’s targets for paying a bonus again – PBTBE of £150m and debt ratio of less than 4x – all partners will receive a 3% bonus, plus staff will also benefit from a 2% pay rise this year as the Partnership will pay voluntary Real Living Wage nationwide, investing £54m in pay plus £46m in bonus, while the whole executive team have said they will donate their bonus to the British Red Cross.
Dame Sharon added: “With the pandemic and with so much change within our business, I don’t underestimate the personal impact and I am truly grateful.
“As we head into the second year of the Partnership Plan, our five-year strategy to transform the business, we’re gaining momentum in the most competitive retail market in history. Our focus on quality, value, sustainability and exceptional service is serving us well.”
The Partnership cut costs by £170m over the year, which Dame Sharon said was a major factor behind its profit growth, and she admitted there had been “difficult decisions” necessary to ensure the Partnership is sustainable in the future, such as reducing management roles in stores, reducing central teams, plus the closure of eight John Lewis stores and a delivery hub.
Dame Sharon told staff: “We have made a good start to our Partnership Plan but are only one year through our five-year transformation. Looking ahead, we see continued uncertainty from global events, affecting the economic environment, our customers, partners and society.
“As inflation and energy prices rise, our customers face higher living costs. While this creates uncertainties as we look ahead, we remain focused on investing significantly in our Partnership Plan to transform and grow our business.”
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