John Lewis furloughs 14,000 staff and slashes millions from spending plans

21st Apr 2020 15:43

(Sharecast News) - John Lewis announced it is furloughing 14,000 staff and slashing hundreds of millions of pounds from its spending plans for 2020 after predicting that store sales could fall by a third amid the ongoing coronavirus crisis.
The company said it was planning for a "worst-case scenario" in which it could see sharp declines in sales until June, followed by a period of weak demand.

Sharon White, the group's chairman, said it was a time of "great uncertainty and volatility" with the full-year picture for its finances "impossible to predict.

"We are therefore looking at a range of different possible outcomes and how these might affect profits, sales and cashflow," said White.

"Over the course of the full year, this worst case would result in a sales decline of around 35% in John Lewis - around double the current level - while at Waitrose it would result in a more modest decline of less than 5%."

Around 50 stores have been closed in the wake of the lockdown and despite having seen an 84% rise in online sales, it does not cover for the lost sales from the shop closures.

Shoppers were "buying more Scrabble but fewer sofas", White explained, which was resulting in a profit squeeze. Over the past five weeks John Lewis sales are 17% down on 2019.