John Lewis Christmas sales rise on fashion and beauty strength

By

Sandra Halliday

Published
Jan 10, 2019

On a day when most UK Christmas trading updates talked about falling sales, it was encouraging to see one where the sales trajectory was going in the opposite direction. John Lewis partnership gave us the results of its seven-week trading period to January 5 and while its sales rise wasn't huge, at least it was firmly in the plus column.

Gross sales at the partnership - which includes Waitrose supermarkets and the John Lewis department stores - rose 1.4% to reach £2.207 billion. Fortunately for the fashion sector, the John Lewis chain and its webstore outperformed the supermarkets with gross sales there rising 2.5% to £1.16 billion. They were up 1% on a like-for-like basis and the company said they outperformed the market by 2%.

And in addition to that, Black Friday contributed to the biggest sales week in the chain’s history. 

Chairman Sir Charlie Mayfield said the company had a positive Christmas trading period despite the two main factors affecting the retail sector, "oversupply of physical space and relatively weak consumer demand.”

The John Lewis performance was boosted by particular strength in its Fashion department, which was up 6.8%, “with standouts in beauty up 11.2% and own-brand womenswear up 14.7%.” 

The womenswear strength was boosted by the company’s investment in this area, and its investments in its beauty halls that have “extended popular brands, not widely distributed in the market,” have also helped boost turnover. For instance, the limited distribution Charlotte Tilbury brand has done well and it also saw “excellent performance across premium fragrance ranges which have benefited from newly refurbished displays.”

Importantly too, the company benefited from a differentiated offer across its entire business. It continued to see growing demand for its personalised experiences and saw higher than expected results from its new services, including Beauty Studios and private shopping, which was fully booked during the Christmas trading period. Plans are under way to roll these out to more shops. 

However, gross margins remained under pressure “in what was an intensely competitive pricing environment.”

The company continues to expect full-year total Partnership profits to be “substantially lower this year, driven by slower sales growth over the year and margin pressure in John Lewis & Partners along with higher costs, mainly as a result of continued investment in [its] IT capability.”