John Lewis furloughs 14,000 staff and slashes millions from spending plans

John Lewis announced it is furloughing 14,000 staff and slashing hundreds of millions of pounds from its spending plans for 2020 after predicting that store sales could fall by a third amid the ongoing coronavirus crisis.

The company said it was planning for a “worst-case scenario” in which it could see sharp declines in sales until June, followed by a period of weak demand.

Sharon White, the group’s chairman, said it was a time of “great uncertainty and volatility” with the full-year picture for its finances “impossible to predict.

“We are therefore looking at a range of different possible outcomes and how these might affect profits, sales and cashflow,” said White.

“Over the course of the full year, this worst case would result in a sales decline of around 35% in John Lewis – around double the current level – while at Waitrose it would result in a more modest decline of less than 5%.”

Around 50 stores have been closed in the wake of the lockdown and despite having seen an 84% rise in online sales, it does not cover for the lost sales from the shop closures.

Shoppers were “buying more Scrabble but fewer sofas”, White explained, which was resulting in a profit squeeze. Over the past five weeks John Lewis sales are 17% down on 2019.