BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Thursday, 14 September, 2000, 17:28 GMT 18:28 UK
John Lewis profit bombshell
John Lewis
Stormy times at John Lewis as profits plummet
Department store group John Lewis is attempting to blame a 43 % drop in half-year profits on a 20m 'one-off' spending spree.

The unlisted company - which has a unique ownership structure - is refusing to panic at today's half-year figures.

It points to an unusually high number of 'one-off' items and tough trading conditions in the north of England to account for the dramatic fall.

Stuart Hampson
John Lewis chairman Stuart Hampson
The group saw pre-tax profits plummet to 38.5m on a turnover of 1.9bn. Exceptional items came to 20m, compared to 3m for the previous trading period.

John Lewis employees receive a bonus based on the size of the company's profits - so the news will affect their pay packet.

'Sales forging ahead'

Extra costs included the conversion of 11 former Somerfield stores in the South West to Waitrose outlets and 6m back holiday pay it owed to staff.

The company also wrote off 4m during the refurbishment of its Peter Jones store in London's exclusive Sloane Square, which is costing a total of 80m.

Following adjustments, the high street giant claims its profit drop is actually 18% and sales are now forging ahead.

According to its own weekly figures, sales were 14.2 % higher year-on-year in the week to 2 September in John Lewis' 25 department stores, while food group sales were 12.8% ahead.

North/South divide

John Lewis is one of the country's largest department store chains, with 50,000 employees.

In the past it has been singled-out by the Government as an example of a 'stakeholder' business.

There is a contrast between confident trading in many of the southern-based shops and the tougher conditions faced elsewhere in the UK

John Lewis spokesman

In recent years it has expanded out of its southern heartland to open stores as far afield as Glasgow.

But chairman Stuart Hampson claims a growing north/south divide in trading conditions has held profits back.

A company spokesman says: "There is a contrast between confident trading in many of the southern-based shops and the tougher conditions faced elsewhere in the UK,"

Overall sales on the high street picked up last month, according to official figures published this week.

The Office for National Statistics reported retail sales in August grew by 0.6% - stronger than the City was expecting - and stand 4% up on the year.

The figures showed for the three months to the end of August the volume of sales was up 1.1% than in the previous three months and 4.2% higher than in the same period a year earlier.

Search BBC News Online

Advanced search options
Launch console
See also:

14 Sep 00 | Business
High street sales pick up
06 Sep 00 | Business
M&S in e-commerce drive
13 Sep 00 | Business
Debenhams boss steps down
13 Sep 00 | Business
Kingfisher splits in two
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories