John Lewis extends partner marketing to home range after 'fantastic' response in fashion

John Lewis: is introducing bigger and more prominent personal styling spaces across all stores
John Lewis: is introducing bigger and more prominent personal styling spaces across all stores

Profit at department store falls by half, but business retains staff bonus despite reports suggesting it could be scrapped.

John Lewis & Partners says its efforts to become a more experience-led business are helping it stay afloat in a "torrid" retail environment, as its parent company reported mixed results for the financial year ending on 26 January.

Sales across John Lewis Partnership were up 1% to £11.7bn, but profit before exceptional items and the bonus paid to partners was down 37.7% to £227m. While Waitrose & Partners increased its profits 18.1% to £203.2m, at the department store they fell 55.5% to £114.7m.

Speaking at a media roundtable this morning, John Lewis managing director Paula Nickolds said four factors had hit the brand’s figures: a general downturn in sales of home products, the impact of discounting by competitors, and the costs of opening two new stores and investing in the business’ IT capabilities.

But she added that it had still increased market share, in a year in which competitors including House of Fraser, Debenhams and Marks & Spencer have suffered far worse outcomes.

Nickolds said the in-store experiences placed at the heart of new stores opened last year in White City and Cheltenham had proven hugely popular. The brand’s upgraded personal styling services have been the "standout" story, she said, and these will now be rolled out into all 37 John Lewis stores that offer fashion.

The brand’s policy of putting social media marketing in the hands of staff, meanwhile, is being extended into home products, after primarily focusing on fashion last year. There were currently 447 partners involved in the project, Nickolds said.

"We’ve seen a really fantastic response to that, both commercially but also in how partners feel about being able to influence the business more personally," she said. "The engagement levels of the partners has been one of the most exciting things to come out of that – opening up the freedom for them to talk on behalf of their business."

After media reports that the business was considering scrapping its staff bonus for the first time since 1953, the news that it had decided to pay a 3% bonus – still the lowest since that year – was met by a "cheer louder than when we’ve had 15%", chairman Charlie Mayfield said.

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