John Lewis chief predicts fast return to profit

John Lewis partnership may have previously said that its turnaround will take longer than expected to complete, but it’s chairman Sharon White has also just said that the company will return to profit this year.

As it works on plans to potentially cut up to 11,000 jobs over the next half-decade, White issued a video message telling the company’s employees – who are the business’s owners and known as Partners – that they need to expect some big and bold changes.

It recorded a £234 million loss last year but this week she also said: “There’s been an awful lot of change over the past year. But those efforts are starting to show themselves in our commercial performance. We are converting more of our sales into return to partners, and we will more than break even this year, which is a great start as we build back to sustainable profit for the business.”

The company has been loss-making for several years so the news that it’s getting closer to a profits bounce-back is encouraging. That’s especially so given that the chairman had said as recently as September that sustainable profits were a few years away.

White and CEO Nish Kankiwala also stressed that layoff were a last resort and that they’re aiming to cut as many of the jobs as possible by “natural turnover”. The company currently replaces thousands of workers each year who leave.

Kankiwala added that the company has to “fix the basics of our business… fundamentally we have to have our shops looking great again” in order to create a “sustainable partnership, which remains independent”.

And he insisted that the firm is doubling down on retail, perhaps suggesting a move away from the earlier — much criticised — idea of the business diversifying into areas such as financial services and build-to-rent homes.