John Lewis could lay off up to 250 workers as pension costs hit profits

John Lewis says it could lay off up to 250 warehouse workers as part of a lacklustre trading update that saw its half-year profits slump.

The group, which owns the department store chain as well as upmarket grocer Waitrose, also warned that it was likely to miss full-year profit targets due to increased pension costs.
In an unusual step, chairman Sir Charlie Mayfield issued earnings guidance, saying pension charges will be about £60million higher than the comparable figure last year.
Closures: John Lewis said that up to 250 staff could lose their jobs as it shuts down three distribution centres

Closures: John Lewis said that up to 250 staff could lose their jobs as it shuts down three distribution centres
This was due to the economic climate dragging down the value of investments made by the pension fund. ‘In the current market, even a strong trading performance is unlikely to offset this fully,’ he said.
The equivalent of pre-tax profit would be between £270million and £320million, versus £342.7million last year.
The supermarket price war and difficult trading conditions for the department store also had an effect.
Half-year profits fell 26 per cent to £96million while sales grew just 2.1 per cent to £5.1billion.
The firm slipped out news that up to 250 staff could lose their jobs as it closes three distribution centres. It has been forced to put aside £4million to cover redundancies.
Underlying sales at Waitrose fell 1.3 per cent – the first time they have fallen in more than five years.
Mayfield said: ‘This has been a solid first half for the partnership in a difficult market.’ 

 

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Posted on September 11, 2015, in #retail, #uk, How not to do retail ..... Bookmark the permalink. Leave a comment.

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