John Lewis Partnership (JLP) has revealed it has furloughed over 14,000 members of staff and will slash over £200m from its year spend.
The effort to cut costs, which was announced in a letter to partners and staff, comes as John Lewis revealed a “mixed” trading period. With all 50 John Lewis stores closed, it said it has seen a “significant” spike in online sales which are up 84% year-on-year since the middle of March.
However, overall, it revealed that John Lewis sales are down 17% year-on-year since the middle of March, and down 7% year-on-year since 26 January.
The cost saving initiative comes as it prepares for a “worse case scenario” that assumes significant sales decline between April and June, and weak sales thereafter.
Over the course of the full year, it predicts the worst case would result in a sales decline of around 35% in John Lewis, and a slightly more modest decline of less than 5% at Waitrose.
JLP chairwoman Dame Sharon White said in the letter: “I announced in March that we will be undertaking a Strategic Review of the Partnership, to strengthen our core retail business and develop new services outside retail.
“The review will now be accelerated and will be substantially complete by the summer. It will seek to take account of changes in consumer behaviour to come out of the pandemic, such as a more pronounced shift to online and a desire to shop in more sustainable ways.”
She added: “The Partnership has been trading for nearly a century. It has survived a world war and bombings, economic crashes and crises. Thanks to you, we shall also come through Covid-19 too and emerge stronger.”
However the news comes as it emerges that the company issued an almost £1m payout to former managing partner Paula Nickolds, who left the department store business in January.
John Lewis said the payout was made to cover her notice period, contributions to legal fees and “career development support”.