Trade Resources Company News Furniture Sales up But Profits Decline at John Lewis

Furniture Sales up But Profits Decline at John Lewis

Furniture Sales up But Profits Decline at John Lewis

John Lewis delivered gross sales of £2.02b for the HY ended 30th July – up 4.5%, with LFL sales growth of 3.1%, ahead of its more critical sales and profit-driving second half.

Despite growing sales, operating profit fell by 31.2% to £32.4m, with more than half of this decline due to transitioning costs in the retailer's distribution network, reflecting the continued shift to online and a market dynamic of competitive pricing.

The new Magna Park fulfilment centre we will open this month – part of a £150m investment in the retailer's supply chain.

"Across our product areas, we increased gross sales and market share and invested in our in-house design capability to build our unique combination of own-brand collections and the best brands on the high street," reports the retailer.

Home sales were up 3.7%, as John Lewis continues to build towards a £1b own-brand business in the category. Sales were driven by furniture, up 6.8%, with beds up 13.7%. Outdoor living had a record half, up 14%. The roll-out of West Elm continued, and the retail concession is now present in seven stores.

While sales through thirough retail outlets were down 1%, 65.5% of John Lewis' merchandise sales come from branches, and three-quarters of its customers buy in shops. This year, John Lewis will open in two new locations – in Leeds and Chelmsford.

Online sales represented 34.5% of total merchandise sales, up from 30.6% last year.

Overseas, John Lewis continues to roll out its wholesale model, with shop-in-shops in Australia and Ireland opening next year, taking the total international locations to 29.

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Topics: Furniture