John Lewis employee bonus at 67-year low as profit drops

Bloomberg

John Lewis Partnership Plc’s employees will get their lowest bonuses in 67 years in 2020, though they may be relieved to get anything following the UK retailer’s three straight annual profit declines in a highly competitive market.
The parent company of John Lewis department stores and upmarket grocer Waitrose said it will pay a 2% bonus to its employee-owners as it reported a 23% profit drop for the latest year. Former Chairman Charlie Mayfield had warned in January that the payments might be eliminated this year. The 2% equates to about a week’s pay.
Deciding whether to scrap the bonus was the first tough test for Sharon White, the former UK telecommunications regulator who succeeded Mayfield as chairman in February. She said that the company is starting a strategic review of the business and will close three Waitrose stores.
John Lewis is owned by its more than 80,000 employees, known as “partners.” Once as high as 24% of a worker’s salary, the annual profit-sharing bonuses fell to 3% last year, the lowest since the era of postwar rationing. White plans a full-scale review of the partnership to be completed by the autumn, which will involve developing new services “outside retail,” she said in the statement. There may also be more shop closures.
The overall decline in earnings for the year ended on January 25 stemmed from the department-store arm, where operating profit before payment of the bonuses fell about 66% to 39.5 million pounds ($51 million). John Lewis suffered from weak Christmas sales and has faced intense competition, particularly from online rival Amazon.com Inc. The partnership took a writedown of 123 million pounds on the value of its department stores.
Waitrose performed better in the year, with profit on the same basis rising 4.7% to 212.7 million pounds.