John Lewis FY fashion sales boosted by investment
- FY fashion sales up 6.2%
- Investment boosts fashion sales and market share
- John Lewis operating profit down 0.1%
John Lewis saw its fashion sales rise 6.2%
UK department store group John Lewis saw growth in fashion sales last fiscal, and an increase in the division's market share, thanks to investment in its brands.
Fashion sales were up 6.2% in the 52 weeks ended 30 January, boosted by the group's strategy of combining signature own-labels, an edited selection of brands, and exclusive collaborations. Men's wear sales climbed 8.8%, while women's wear grew 6.5%.
Operating profit at John Lewis's namesake business, however, was down 0.1% to GBP250.2m (US$355.7m), held back by restructuring costs and absorbing a greater share of centrally-incurred functional costs. Excluding property, profit edged up 0.4%.
Revenue was up 2.7% to GBP3.66bn, outperforming the market, despite "uncertain trading conditions" and thanks to investment in shops, e-commerce and infrastructure.
Online sales increased by 17.3%, while sales in shops were down 1%. Click and collect orders grew by 11% in the period, accounting for 53% of online orders. Sales through mobile devices increased by 34% and smartphones by 86%.
For the John Lewis Partnership, which includes the company's Waitrose supermarket chain, pre-tax profit was down 10.9% to GBP305.5m as a result of higher pension charges arising from volatility in the market and lower property profits. Sales, however, edged up 0.5% to GBP9.75bn.
Chairman Sir Charlie Mayfield said: "The Partnership has delivered a healthy trading performance and increased market shares in challenging conditions. Quality, value and product innovation were therefore all the more important alongside greater convenience and service. Our partners performed well on all those fronts and did so while controlling costs tightly and increasing margin."
In 2016, John Lewis will open two shops in Leeds and Chelmsford, two major distribution centres in Milton Keynes and invest in "significant changes" to its technology infrastructure.
Verdict Retail analyst Sophie McCarthy described the results as "muted" but said the retailer continues to "push ahead for the future".
She notes: "With its new Birmingham store opening last year it has demonstrated an ability to respond to the changing consumer demands of the store environment, introducing leisure facilities, such as a beauty spa, and focusing on inspiration. As further proof of the continuing British love affair with John Lewis, its 'my John Lewis' programme members also increased by 32% over the year to reach 1.8m, evidence that the retailer will continue to prosper."
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