Retailer John Lewis reports 20% higher profit in 2010

John Lewis - Profits Grew in a Difficult Year

John Lewis – Profits Grew in a Difficult Year

Department store chain operator John Lewis reported 20% higher profits in 2010, warning 2011 can be worse due to higher input cost and taxes.

Net profit rose by £61.3 million to £367.9 million in 2010. Expressing satisfaction over the company’s results, chief executive Charlie Mayfield attributed the profit growth to “strong performance”.

However, he said 2011 can be tougher on account of rising input costs, higher VAT and rising unemployment.

Each member of staff at the employee owned partnership firm will receive bonuses equal to nine weeks of pay on an average. John Lewis’ 76,500 staff members will share a bonus pool of £194.5 million, equivalent to 18% of their annual pay packages.

Annual sales were recorded at £8.21 billion, a marginal grow of 0.6%.

However, the company’s online unit witnessed a sales jump of 38%, while like-for-like sales at its 28 stores rose by 10%.

Waitrose – the company’s 224 supermarket store chain, recorded a like-for-like sales growth of 4% (excluding Petrol) in 2010.

John Lewis hopes to hire 4,300 employees this year and claimed to have created 4,100 jobs last year.

Although the 147 year old company plans to spend £600 million in 2011 for expansion, it remains cautious about trading prospects in 2011.

“We expect trading conditions to be more difficult in 2011, as the VAT increase, rising unemployment, and public sector spending cuts begin to have an impact on consumer spending”, said Mr. Mayfield.

“Input cost price inflation is also a continuing threat but we are not yet seeing the level of inflation in our prices that is widely quoted”, he added.

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