The John Lewis Partnership has cut its bonus to a 55-year low of 3 per cent after profits tumbled in the last financial year.
Staff had been concerned that the bonus would be cut completely as a result of the company’s struggles last year.
The bonus has been reduced every year for the past six, and employees received 5 per cent last year, down from a 15 per cent reward 10 years ago.
The high street giant reported a 1 per cent increase in sales, up to £11.7bn from £11.6bn, however profit before tax fell 45 per cent to £160m from £293m.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said this decline was due to weaker home sales, pressure on margins and higher IT costs.
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AFP/Getty
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1/9 Toys ‘R’ Us
Customers shop at a Toys ‘R’ Us store. The retail chain announced plans to shut all of its US stores, becoming one of the biggest casualties of the retail shakeout amid the rise of e-commerce. The debt-plagued company announced that it has filed a motion for bankruptcy court approval to liquidate its US operations, a move that could hit 33,000 jobs. The UK retailer failed to find a buyer and said their 105 Toys R Us stores would remain open until further notice, with administrators appointed to begin “an orderly wind-down”.
AFP/Getty
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New Look announced it will shut 60 stores and cut 980 jobs as part of a restructuring plan agreed with its creditors.
PA
3/9 Maplin
A Maplin store displays closing down notices after the company went into administration.
Reuters
4/9 Claire’s Accessories (US only)
People walk past a Claire’s store in downtown Chicago. The chain that has pierced the ears of millions of teens has filed for Chapter 11 bankruptcy protection. The accessories chain said that its stores will remain open as it restructures its debt.
AP
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Carpetright announced that it has secured £12.5m of emergency funding from one of its largest shareholders and that it is exploring the opportunity of seeking approval for a restructuring plan under which it would slash rents and shut stores to avoid going into administration.
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Suits specialist Moss Bros has reported a drop in earnings and profit in 2017, blaming a “tough end to the year” and stock shortages which hurt sales. Chief executive Brian Brick said: “Going forward, we are planning for an extremely challenging retail environment, not least because of the uncertain consumer environment and significant cost headwinds.”
PA
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Mothercare warned over profits after UK sales plunged in the run-up to Christmas 2017, with consumer spending falling in both stores and online.
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The Chinese owner of House of Fraser plans to sell its majority stake in the troubled department-store chain, adding to the upheaval on the UK’s shopping streets.
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He said: “While Partnership profits were down, there were several areas where we have seen performance move forward, particularly in areas where we have invested.
“In John Lewis & Partners the launch of our own-brand womenswear and expansion of personal styling offer has driven strong sales growth in fashion, growing market share significantly.”
Sir Charlie added that cutting the bonus would enable the group to “continue debt reduction, maintain our level of investment and retains solid cash reserves to cope with the continuing uncertainty facing consumers and the economy”.
“We expect 2019 trading conditions to remain challenging but are confident in our strategic direction and customer offer across both brands,” he said.
The retailer issued a profit warning last year, and announced plans to close several Waitrose stores, amid a tough year for the British high street.
John Lewis has been put under particular pressure due to its ‘Never Knowingly Undersold’ policy, and said it had seen an unprecedented level of price-matching last year.
At the beginning of 2019, the firm said Christmas trading had been disappointing, reporting the worst performance since the financial crisis.
Sir Charlie is due to stand down next year, having been in the chairman role since 2007.
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