John Lewis Partnership has warned a no-deal Brexit will have a “significant” impact on business as it posts a half-year loss of £25.9m.
The Group, which also owns Waitrose, reported a loss of £25.9m, down from a profit of £0.8m last year.
For the John Lewis side of the business, total sales were £2.1bn, down 1.8%.
Sales slipped amid “difficult” trading conditions, which were not helped by “subdued consumer confidence”.
The partnership said in its official statement that it has been making preparations for a no-deal Brexit, including building up stocks “where that is sensible”, but warned it could not fully offset the effect and the impact on fresh food supplies was a concern.
The partnership’s chairman, Charlie Mayfield, remarks: “We have historically made the majority of our profits in the second half of the year. Although we expect retail conditions to remain challenging, we are pressing on with key areas of innovation such as Waitrose Unpacked and the renewal of key ranges in areas like Menswear and Home. Over the next 12 months, we will also accelerate our transformation of the Partnership to deliver innovation faster and increase emphasis on the competitive difference of Partners.
“However, should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate that impact. In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness. However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”
Looking to the future, John Lewis plans to reach more customers by expanding its network of “click and collect” points at Co-op stores.
In May, the department store announced that online shoppers would be able to pick up their purchases at six Co-op stores as part of a trial. John Lewis now plans to extend that to another 50 by the end of October.