Newspaper article The Journal (Newcastle, England)

John Lewis Chairman's Gloomy No-Deal Forecast

Newspaper article The Journal (Newcastle, England)

John Lewis Chairman's Gloomy No-Deal Forecast

Article excerpt

Byline: HOLLY WILLIAMS Business editor business@ncjmedia.co.uk @Jnlbusiness

THE John Lewis Partnership has warned the hit from a nodeal Brexit would be "significant" and impossible to offset as it tumbled to its first ever half-year loss.

The owner of the department store chain and supermarket Waitrose reported underlying losses before tax and staff bonuses of PS25.9m for the six months to July 27, against profits of PS800,000 a year earlier.

It said that, while it was taking actions to prepare for a possible nodeal, it could not entirely protect itself against an expected major impact.

Sir Charlie Mayfield, outgoing chairman of the John Lewis Partnership, said: "Should the UK leave the EU without a deal, we expect the effect to be significant and it will not be possible to mitigate [against] that impact.

"In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness."

But he warned that Brexit "continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period".

His comments came after the Government was forced to release its "worst case scenario" plan for a nodeal Brexit, codenamed Operation Yellowhammer, which showed that no-deal could trigger medical shortages, food price rises and major cross-Channel trade delays.

Sir Charlie said the group's nodeal Brexit fears centred on the impact on fresh food supply and consumer confidence.

He said: "Ultimately, that could have a knock-on impact on profits. That could be significant."

The group is building stocks where it can of some non-perishable foods, such as wine, olive oil and canned food, as well as frozen items.

Sir Charlie said trading conditions had "worsened" in 2019 and would continue to be challenging over its peak sales period as Brexit takes its toll. …

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