John Lewis Partnership has reported a 26.6% drop in pre-tax profit amid “difficult trading conditions”. The retailer, which also owns Waitrose, has seen profits fall by £38.8m to £107.3m over the six months to July 26.
Operating profit at the John Lewis department stores dipped 34.4% to £40m against sales of £1.24bn, down 1% on a like-for-like basis.
Fashion sales at the store, which next week will launch its biggest ever fashion advertising campaign featuring supermodel Karen Elson, grew by 5%.
However, gains in clothing sales were offset by a 5% dip in homewares and furniture, which the group says reflects “the decline in the housing sector”.
Waitrose registered an 8.4% slump in operating profit, down to £102.7m, although this figure includes the impact of property gains, which were higher in 2007.
The fall in profit came despite a bump in total sales, up 5.5% to £2.03bn, and a 2.5% rise in like-for-like food sales.
Charlie Mayfield, chairman of the John Lewis Partnership, says its first half performance reflects an economic climate that has become “progressively more difficult”, with consumer confidence falling and the retail market slowing.
He adds that the outlook “remains challenging” but that the product offering across John Lewis and Waitrose would stand it in good stead to benefit when consumer confidence returns.