John Lewis staff bonus announced after massive profit slump
PUBLISHED: 10:30 07 March 2019 | UPDATED: 10:30 07 March 2019
Retail chain John Lewis & Partners, which has department store in Welwyn Garden City, has cut its staff bonus yet again after its pre-tax profits were "substantially lower" than the previous year.
For the 2018-2019 financial year, the upmarket chain posted pre-tax profits of £160million - a 45 per cent drop from the previous year’s £292.8million.
The company also operates Waitrose, which has branches in Welwyn Garden City, Stevenage and St Albans.
The company famously distributes profits to employees - or “partners”, as they are known - rather than shareholders.
This is given as an annual bonus as a percentage of staff salaries.
The staff bonus has fluctuated significantly in the last few years.
The staff bonus for 2019 will be three per cent, down from last year’s five per cent and six per cent in 2017.
This was not unexpected, as in January the company publicly wondered if a staff bonus of any sort would be “prudent” this year.
READ MORE: John Lewis to consider dropping its staff bonus
The company has also predicted lower profits for some time as it faces an uncertain high street, invests in IT systems, and tries to reduce its debt, which it has succeeded in doing by 13 per cent.
Chair of the John Lewis Partnership Sir Charlie Mayfield said: “In line with expectations set out in June, our Partnership profits before exceptionals have finished substantially lower in what has been a challenging year, particularly in non-food.”
The reduced staff bonus will enable the company 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”, he said.
“We expect 2019 trading conditions to remain challenging but are confident in our strategic direction and customer offer across both brands.”