TIDM45GD
RNS Number : 6657M
Lewis(John) PLC
10 January 2019
John Lewis Partnership
07.00am Thursday 10 January 2019
Christmas trading statement for seven weeks to 5 January
2019
Trading highlights:
-- Gross sales at the John Lewis Partnership were up 1.4% versus last year to GBP2,207m([1]) .
-- Waitrose & Partners gross sales (excluding fuel) were
GBP1,047m, up 0.2% versus last year and up 0.3% on a like-for-like
basis, despite reduced promotional activity.
-- John Lewis & Partners gross sales were GBP1,160m, up 2.5%
versus last year and up 1.0% on a like-for-like basis and
outperformed the market([2]) by 2.0%.
-- Black Friday contributed to the biggest sales week in John
Lewis & Partners' history and in Waitrose & Partners online
sales over the Christmas period increased by 12.8%.
-- Good progress on our business strategy focusing on
differentiated products and services and maintaining investment in
new capabilities.
Sir Charlie Mayfield, Chairman of the John Lewis Partnership,
said: "Two main factors are affecting the retail sector -
oversupply of physical space and relatively weak consumer demand.
Despite this, we had a positive Christmas trading period thanks to
the extraordinary efforts of Partners in our business, delivering
differentiated products and service to customers.
John Lewis & Partners like-for-like sales grew by 1.0%
overall, with particularly positive performances in Fashion up
6.8%, with stand outs in Beauty up 11.2% and own-brand Womenswear
up 14.7%. However, gross margins remained under pressure in what
was an intensely competitive pricing environment. Waitrose &
Partners achieved the best operational performance we have seen for
some years, with good availability, low wastage and Partners
focused on providing better customer service. Like-for-like sales
increased by 0.3%, despite a sharp reduction in the level of
promotions as we focused on our most loyal customers. We are well
on track to grow Waitrose & Partners' profits for the full
year.
We continue to expect full year total Partnership profits to be
substantially lower this year, driven by slower sales growth over
the year and margin pressure in John Lewis & Partners along
with higher costs, mainly as a result of our continued investment
in our IT capability. The actions taken in recent years to prepare
for the current pressures in retail mean that the Partnership has
the financial strength and flexibility to pay a modest bonus this
year, without impacting our ambitious investment programme.
However, the Board will need to consider carefully in March,
following the usual process, whether payment of a bonus is prudent
in the light of business and economic prospects at that time."
Delivering our strategy
In summer 2018 we outlined an update to our business strategy
and we have continued to make good progress. This sees Waitrose
& Partners and John Lewis & Partners focusing on
differentiation not scale and offering increasingly unique and
exclusive products and services to customers; enhancing the role
that Partners play in driving our difference and competitiveness;
maintaining investment levels at GBP400m-GBP500m a year; and
strengthening our balance sheet by GBP500m over three years.
We expect to deliver significant positive free cash flow this
year, continuing to prioritise a very strong liquidity position and
a reduction in our Debt ratio over the medium to-long-term. We will
repay the maturing GBP275m April 2019 bond out of existing cash
reserves, which we have further increased with the recent addition
of GBP125m of medium-term bank debt, therefore reducing outstanding
debt by GBP150m.
Waitrose & Partners
This Christmas saw Waitrose & Partners offer a strong and
innovative product range and we are on track to deliver full year
profit growth. A well-planned, smooth-running operation and good
availability allowed our Partners to focus on providing great
customer service, with particularly strong growth online at
12.8%.
Differentiation: Product innovation
-- Increased own brand and exclusive festive products, launching
over 500 new and improved Waitrose & Partners lines. These
included the new Honeycomb Bubble Dessert.
-- A total of 25 new vegan and vegetarian products, such as
Jackfruit Tacos were launched in the lead up to Christmas - helping
drive a 94.3% increase in sales of vegetarian meals.
-- English and Welsh wine continued its strong performance with sales growth of 21.4%.
-- Free From products and dairy alternatives saw a rapid rise in
sales - up 12.2% and 40.9% respectively.
Differentiation: Great service
-- Customer satisfaction improved significantly year-on-year due
to improvements in stock availability, Partner service quality and
ease and speed of the checkout process.
-- Customers saw availability, both instore and online, improve
by 165 basis points on last year.
Differentiation: Doing the right thing
-- As part of our commitment to eliminate hard-to-recycle black
plastic packaging from own-label products by the end of 2019, we
removed it from many of our Christmas puddings, mince pies, party
food, biscuits and chocolate boxes. Our own-label meat, fish, fruit
and vegetables also no longer have black plastic packaging,
delivering on our commitment to do this by the end of 2018.
-- In a supermarket first, we also announced that by Christmas
2020 our own-label cards, wrap, crackers, tags, flowers and plants
will either be glitter free or an environmentally friendly
alternative will be used.
John Lewis & Partners
John Lewis & Partners grew like-for-like sales and, despite
significant outperformance of the market last year, outperformed
once again; with notably strong trading in Fashion, particularly in
Womenswear and Beauty.
The trading period was defined by a longer Black Friday
promotion, a very strong week running into Christmas including a
record Christmas Eve in shops, as customers took advantage of the
full shopping weekend, and an encouraging first week of
Clearance.
Differentiation: Desirable products
-- We had a strong performance in Fashion, with sales up 6.8%.
We continue to make good progress with both our own-brand and
exclusive products with particularly strong performance in
own-brand Womenswear, up 14.7%.
-- Beauty performed exceptionally well, with sales up 11.2%
owing to the investments in our beauty halls that have extended
popular brands, not widely distributed in the market, such as
Charlotte Tilbury. We have also seen excellent performance across
our premium fragrance ranges which have benefited from newly
refurbished displays.
-- Technology continued to be popular with standout lines such
as Dyson Airwrap, Apple Airpods and Macbook Air proving popular
presents.
-- Customers turned to us for gifting and to decorate their
homes for Christmas. As a result, we had a record year for Gift
Food and our personalised Quality Street tin service created
excitement in our shops as well as our new own brand gift
collection 'Find Keep Give' exceeded expectations.
Differentiation: Exceptional service
-- Leveraging our excellent operational performance enabled us
to extend the cut off for Click & Collect orders to all our
shops and, for the first time, over 100 Waitrose & Partners
shops so customers could order later for delivery in time for
Christmas.
-- We fulfilled 26,000 Click & Collect orders on Christmas
Eve alone, up 52% compared to last year and also enjoyed a record
Christmas Eve in shops.
Differentiation: Services
-- We continue to see growing demand for our personalised
experiences. We saw higher than expected results from our new
services, including Beauty Studios and private shopping, which was
fully booked during the Christmas trading period. Plans are
underway to roll these out to more shops.
-- Partnership Card enjoyed a record level of applications over the peak period.
Enquiries
For further information please contact:
John Lewis Partnership
Simon Fowler, Partner & Director of Communications, 07710
398460
Clayton Hirst, Partner & Group Head of Corporate Affairs,
07947 708167
Sarah Henderson, Partner & Group Senior External
Communications Manager, 07764 676036
Citigate Dewe Rogerson
Simon Rigby, Joint Managing Director, 07771 784446
Jos Bieneman, Director, 07834 336650
Ellen Wilton, Associate Director, 07921 352851
John Lewis & Partners
Gillian Taylor, Partner & Head of Communications, 07919
057931
Emily Dimmock, Partner & Senior Corporate Communications
Manager, 07712 545677
Waitrose & Partners
Graeme Buck, Partner & Head of Communications, 07703
379561
Gill Smith, Partner & Senior Corporate PR Manager, 07887
898133
Debt investors
Alan Drew, Partner & Head of Treasury and Corporate Finance,
07525 582955
Notes to editors
The John Lewis Partnership johnlewispartnership.co.uk owns and
operates two of Britain's best-loved retail brands - John Lewis
& Partners and Waitrose & Partners. Started as a radical
idea nearly a century ago, the Partnership is now the largest
employee-owned business in the UK, with 83,000 employees who are
all Partners in the business and share in its profits. The
Partnership operates on strong democratic principles, which means
that every Partner has a say in how the organisation is run. The
business has annual gross sales of over GBP11.5bn, 400 shops and a
leading online business. Its commercial strategy is focused on
differentiation rather than scale, through investment in innovation
and Partner led service.
Waitrose & Partners has 349 shops in England, Scotland,
Wales and the Channel Islands, including 65 convenience branches,
and another 27 shops at Welcome Break locations. It combines the
convenience of a supermarket with the expertise and service of a
specialist shop - dedicated to offering quality food that has been
responsibly sourced, combined with high standards of customer
service. Waitrose & Partners exports products to more than 50
countries worldwide and has nine shops which operate under licence
in the Middle East. The retailer's omnichannel business includes
the online grocery service, Waitrose.com, as well as specialist
online shops including waitrosecellar.com for wine and
waitroseflorist.com for plants and flowers.
John Lewis & Partners operates 51 John Lewis & Partners
shops across the UK (37 department stores, 12 John Lewis at home
and shops at St Pancras International and Heathrow Terminal 2) as
well as johnlewis.com. The retailer stocks around 350,000 separate
lines in its department stores and on johnlewis.com across fashion,
home and technology. This year John Lewis & Partners won, 'Best
Multichannel Retailer 2018', 'Best Clothing Retailer 2018', and
'Best Furniture Retailer 2018' at the GlobalData Retail Customer
Satisfaction Awards 2018. John Lewis Finance offers a range of
comprehensive financial services products - including Insurance,
Foreign Currency, International Payments and the Partnership Card -
delivering the values of expertise, trust and customer service
expected from the John Lewis brand johnlewisfinance.com
([1]) Seven week period this year runs from 18 November 2018 to
5 January 2019 (last year - seven weeks to 6 January 2018).
([2]) British Retail Consortium (BRC).
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END
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