The John Lewis Partnership has taken the difficult decision to temporarily close all of its 50 John Lewis shops at close of business on Monday 23 March as a result of the impact of Coronavirus. Johnlewis.com will continue to operate as normal, alongside Waitrose shops and waitrose.com. This will be the first time in the 155-year history of the business that it will not open its shop doors for customers.
As a consequence, Waitrose food offers within department stores at Watford, Southampton and Bluewater will also close but johnlewis.com – which generates half the brand’s business – will continue to operate as normal, alongside waitrose.com. Customers can choose to have orders delivered to their home, or to Click & Collect from their local Waitrose. The food halls within John Lewis Oxford Street and Waitrose shops which share premises with John Lewis space at Kingston, Ipswich, Stratford, Horsham, Basingstoke and Canary Wharf will remain open, along with all other Waitrose branches and Waitrose.com grocery deliveries.
Chairman Sharon White, said: “The welfare of our customers, communities and Partners is always our absolute priority. While it is with a heavy heart that we temporarily close our John Lewis shops, our Partners will, where possible, be taking on important roles in supporting their fellow Partners, providing critical services in Waitrose shops and ensuring our customers can get what they need through johnlewis.com, which is seeing extremely strong demand.
“The Partnership has traded for over 155 years, during which time we have faced many difficult periods, including two world wars and the 2008 financial crisis. On every occasion, thanks to our customers and Partners, and the long standing relationships with our suppliers and stakeholders, we have emerged stronger. We all need to continue to support each other and our strength and resilience will be tested. But they will not be broken.
“I also want to give my personal thanks to every single Partner for their extraordinary efforts, I am truly grateful. And to the wider community for pulling together with us during such unprecedented times.
“All 338 Waitrose shops in England, Scotland, Wales and the Channel Islands will remain open as will waitrose.com. Over 2,000 John Lewis Partners are already working in Waitrose shops to assist with the unprecedented demand for grocery and other essential goods and wherever possible, John Lewis Partners will be redeployed to provide additional support to Waitrose and johnlewis.com for our non-food online business.
“We are seeing a surging demand in Waitrose and online but like other businesses our shop footfall in John Lewis has fallen and this extraordinary volatility makes predicting full year cash flow and profits difficult. Although there has been a rising demand in food so far, it may peak further, as people are asked to stay at home. We expect Fashion sales to decline but Electricals & Home Technology and some Home product lines to increase as people continue to work from home and need to stay connected.
“We are a diversified, resilient and strong business. Our financial strategy is focused on improving our financial strength and flexibility and managing cash and liquidity tightly. The Government’s decision to introduce a business rates holiday will save the Partnership around £160m over the next 12 months, and in addition, VAT and wages support is welcomed.
“We have reduced our total net debts by more than £1bn over the past five years and doubled our level of liquidity over the same period. We currently have approximately £1.5bn of liquidity, consisting of over £950m cash and £500m of undrawn committed credit facilities. Our current scenario, which takes into account the temporary closure of our John Lewis department stores, and models a significant net cash outflow in the year, shows that we have sufficient liquidity. However, we are not complacent; the scale of the societal and business impact of Coronavirus is like nothing we have seen in recent times.
“We will continue to take further steps to protect our liquidity as far as possible by reducing expenditure such as:
- Reducing our capital and investment expenditure through postponing or pausing projects and change activity. We had originally anticipated spending more than £500m this year which will be scaled back significantly.
- Deferring or cancelling discretionary spend. We currently have more than £500m of annual discretionary revenue spend. We are reducing non-essential spend at all levels, freezing non-essential recruitment and reducing marketing spend.
- Reducing the supply pipeline in general merchandise to reflect the impact of our temporary shop closures.”