After a four-year absence, the annual staff bonus has returned to the John Lewis Partnership. The 2% payout comes as the company reports a 6% increase in underlying profits, reaching £134 million for the year ending January 31. This payout is a milestone for the group’s 69,000 partners, who have endured a lengthy period without profit-sharing.
The bonus has been a rare sight recently, with the company opting to skip the payment in four of the last five years. Even last year, when profits tripled, the board chose to retain cash for business reinvestment. This conservative fiscal approach was a response to the massive losses sustained during the pandemic and the ongoing pressure from online retail giants.
While the underlying figures showed growth, the partnership’s bottom line was hit by external factors. Increased national insurance and packaging taxes cost the firm £53 million, while technology write-downs contributed to a £21 million pre-tax loss. Despite these hurdles, the company’s retail operations remained robust, with Waitrose delivering a standout 13% increase in operating profit.
The current leadership under Jason Tarry is focused on a “retail-first” agenda. This has led to the abandonment of a large-scale rental housing project that was previously a pillar of the group’s diversification strategy. Instead, the focus has shifted to refurbishing existing stores and introducing popular fashion labels to attract a younger demographic to the department stores.
Looking ahead, the partnership expects the trading environment to remain difficult. However, management believes that “disciplined financial management” will allow for continued investment in the brand. The group aims to find further efficiencies while expanding its financial services to create a more stable, diversified business model.