UK: John Lewis Profits Plummet By 43 Per Cent
Department store, John Lewis, has pledged to bring costs down after profits slumped by 43 per cent in the first half of the year. The store, whose slogan is "never knowingly undersold", blames the combined pressure of falling prices for many goods and the continuing growth in costs. Chairman, Sir Stuart Hampson, said he would bring costs down by reducing bureaucracy and improving the use of technology. Despite a 10 per cent increase in sales for the six months to July 29 to £1.9bn, pre-tax profits plummeted to £38.5m at the company's department stores and Waitrose supermarkets. The group has suffered from a string of one-off costs, including £6m to meet new arrangements for accrued holiday pay and start-up costs of a series of major redevelopments. These include the refurbishment of 11 Somerfield stores bought in the Spring and the £80m-plus refurbishment programme at Peter Jones. Sir Stuart said: "The one-off items are largely behind us and we can look forward to the new shops beginning to contribute to the profit which will be their important long-term benefit." He said the group had got off to a sound start in the second half of the year, with comparable sales for the first six weeks 7.4 per cent ahead.
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