John Lewis warns on profits, announces Waitrose closures

Another day, another profit warning from the retail sector as high street behemoth John Lewis said its half-year profits will be "close to zero" this year amid "market uncertainty", while profit for the full year will be "substantially" lower than the last.

The retailer expects to see profit growth for Waitrose but a decline for John Lewis, with significant extra cash costs at the partnership level due to greater IT investment, which it said will be a big driver behind the overall profit change.

John Lewis said it will continue to invest in product and service innovation at a rate of £400m to £500m a year and take further steps worth £500m over three years to strengthen its balance sheet.

In addition, the company announced plans to close four Waitrose stores and a supermarket, but did not say which ones, as it looks to make adjustments to its overall estate.

John Lewis also announced that the two brands that make up the business will be known as Waitrose & Partners and John Lewis & Partners.

"It is widely acknowledged that the retail sector is going through a period of generational change and every retailer’s response will be different. For the Partnership, the focus is on greater differentiation - not scale.

"We have clear plans to build on our strengths and to sharpen our points of difference in both Waitrose and John Lewis. These plans include further investment in and development of unique products and service, together with a greater emphasis on own brand and innovation."

The company's cash position for this year is expected to be in line or ahead of last year, while its liquidity position is expected to be the best it has been for 10 years.