JLP appoints first chief executive

John Lewis Partnership has appointed its first chief executive, Nish Kankiwala (pictured). Nish has been a non-executive director of the partnership since April 2021, is a former chief executive of Hovis, and has held senior roles at Burger King and PepsiCo.

Partnership chairman Sharon White says: “The new structure allows me to focus on the preservation of the partnership model and our distinctive character, on the strategy for the partnership and our big commercial choices. Nish will draw on his significant transformation experience to drive performance and profitability day to day.”

The news came as John Lewis shared its unaudited results for the year ended 28th January 2023, in which it reported revenues of £3.79b (down -2% YoY). Customer numbers were up +0.5% to 11.7 million. Footfall to stores grew +34% YoY (reaching 100 million for the first time since before Covid), while online traffic was down -5%. The number of customers using both channels during the year was up +4% (21% of the retailer’s customer base). In combination, this led to a channel mix rebalancing from pandemic levels of approximately 70:30 online/shops to almost 60:40.

The retailer says it maintained its market share, with volumes up +1% for the year, supported by a strong performance from its branches, which were up +20%. John Lewis Trading’s operating profit fell by £82m to £676m, yet Home sales continued to prove relatively consistent, at 27% of the sales mix. Across the partnership, loss before exceptional items and tax was £78m, down from a profit of £181m last year. The loss before tax was £234m, down from a loss of £27m last year. The impact of inflation was felt across the business, adding £179m to costs. However, the partnership says it is stepping up its transformation, having delivered over £300m of cost savings in the last two years – and now aims to save another £600m by January 2026.

Profits down at DFS despite market share gains

DFS has announced its interim results for the 26-week period ended 25th December 2022. Profit before tax, excluding brand amortisation, fell by £16.2m to £7.1m (1.3% of revenues), which DFS says reflected a weak market environment, (particularly in Q1).

However, it says higher AOVs, driven by range innovation as well as some retail price increases to counter input inflation, more than offset the impact on revenues of a decline in market volumes compared to FY19 – revenue from continuing operations was £544.5m, down -2.2% YoY (but up +9.4% compared to the pre-pandemic FY19 period).

The retailer says it achieved record market share, extending its position as “the clear market leader”, and that the first phase of its Home strategy is progressing well, with the extension of its upholstery exclusive brand partnerships to bed frames, and the completion of IT development and logistics enabling activities contributing to beds and mattresses to achieve YoY online order growth of +70%.

Full-year profit before tax and brand amortisation is expected to be in a range of £30-£35m – in line with market consensus, but towards the lower end of the retailer’s previous guidance.

Group CEO Tim Stacey says: “The share gains have gone some way to alleviating the impact of the weaker market we have observed in 2022 overall. Profit margins have reduced over the last year due to a combination of significant cost increases and our commercial strategy to ensure that we continued to offer great value for customers in an environment where consumer discretionary spend was under pressure.

“We have, however, improved our gross margins in the first half of this year from H2 of FY22, and further still in the second half to date, through product innovation and selected retail price increases. Cost headwinds are reducing and in some cases reversing, and we expect our upward gross margin trajectory to continue as we execute our margin build-back plan.”