John Lewis sees sales top £4bn
Department store chain John Lewis has seen sales pass £4bn for the first time as staff enjoy a 15% bonus.
Sales reached £4.06bn for the year to 26 January, a rise of 7.5% with like for like sales up 6.4%. Underlying operating profits for the group, including Waitrose, rose 11% to £240.5m.
'This has been another good year for the Partnership. Both Waitrose and John Lewis increased market share for the fifth consecutive year, profit before exceptionals has grown and, for the first time, we have achieved sales of over £10bn. As a result of our performance, I am delighted that 91,000 Partners will receive a bonus of 15%, equivalent to nearly eight weeks' pay. The bonus reflects the balance of a strong trading year, but also the increased costs of pension provision. The exceptional costs of £47m, relating to holiday pay premiums (announced in August), did not affect the bonus percentage,' says Charlie Mayfield, John Lewis chairman.
'Our ownership by Partners has played a key role in these results. There are fundamental changes taking place in retail, especially in customer attitudes towards value, convenience and personalisation. For several years we have been adapting our business to take advantage of these changes. That has required high levels of investment, organisational change and new capabilities. The level of change has at times been challenging, but Partners have understood and embraced the need for their business to continue to develop. As a result we have been able to make important progress in several areas. Innovation in product and service continues to be vital in today's market and there have been great examples of that in Waitrose and John Lewis. We have improved our omni-channel offer significantly with new online platforms for both brands and expansion of the hugely popular Click & collect service. We have also introduced greater personalisation to the relationship with customers, particularly with myWaitrose. To deliver all of this we continue to make improvements to branch structures and are giving greater emphasis to the importance of our leadership teams creating opportunities for individual Partners.'
Home sales rose by 2.3%. 'We made significant progress in our ambition to be the UK's largest home retailer through new initiatives such as Any Shape, Any Fabric and the maturation of our House range,' says Mayfield.
'Omni-channel capability and innovation has been key to our success. We have seen growth in both shops and online, with shops significantly outperforming the high street and johnlewis.com up 19.2% to £1.1bn, achieved while launching a new web platform in the first half. Click & collect has grown strongly, up 57%, with the convenience of being able to pick up from Waitrose being particularly appreciated. Collect+ was successfully launched in September. Mobile also grew rapidly this year, and visits from phones and tablets now account for 50% of traffic to johnlewis.com.
'We continued to build the value and trust our customers expect of us through our commitment to be "Never Knowingly Undersold", and our guarantees were improved further this year through Guaranteed Guarantees, to give a minimum of two years' cover on any electrical item. The my John Lewis membership card was also launched with 500,000 members joining in just four months. Our "The Bear and the Hare" Christmas advertising campaign was also a huge success, with over 12m views on YouTube.
'Behind the scenes, we have invested significantly in our support infrastructure. Our new £97m distribution centre will begin operations in 2015 alongside our existing Magna Park site in Milton Keynes, further enhancing our fulfilment capability.
'Shop developments continue to be a strong focus of our growth strategy. 2013 saw the full refurbishment of our High Wycombe shop, and we have an active pipeline of new sites. In 2013 we opened an At Home shop in Ashford and this year we will open a full line flexible format shop in York, and our smallest shop to date at Heathrow's Terminal 2. We have announced future sites in Birmingham, Leeds, Westfield White City, Oxford, Chelmsford, Horsham, and Basingstoke.'