John Lewis Partnership’s profit plunges
John Lewis Partnership PLC said Thursday that first-half pretax profit plummeted 81%, citing challenging conditions for retailers as gross margins were squeezed amid heavy discounting.
The retailer said it incurred additional costs related to investment in cybersecurity and data protection, which hurt profit.
For the half-year ended July 28, John Lewis Partnership made a profit of 6 million pounds ($7.8 million) compared with GBP30.8 million in the same period a year earlier.
However, revenue increased 1.5% to GBP4.86 billion from GBP4.78 billion.
Revenue at John Lewis & Partners was broadly flat at GBP1.66 billion, while revenue at its grocery business Waitrose & Partners rose slightly to GBP3.19 billion from GBP3.13 billion.
Chairman Charlie Mayfield said that during the period, the gross margin was "squeezed in what has been the most promotional market we’ve seen in almost a decade" as the company aimed to maintain price competitiveness.
The company said it continues to expect full-year profit to be substantially lower than last year. It expects profit growth in Waitrose & Partners to be offset by the continuing margin pressure in John Lewis & Partners and by incremental costs of investment.
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