John Lewis would find no-deal Brexit 'impossible' after posting losses of £25m
PUBLISHED: 09:32 12 September 2019 | UPDATED: 10:05 12 September 2019
One of the stalwarts of Norwich's high street has warned its future could be impossible in the event of a no-deal Brexit.
John Lewis has warned it would not be possible to offset the impact of a no-deal after it reported a half-year loss of £25.9m.
The partnership - which also owns supermarket Waitrose - said that while it was taking actions to prepare for a possible no-deal, it could not entirely protect itself from major impact.
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Sir Charlie Mayfield, outgoing chairman of the John Lewis, 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 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."
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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".
Results from John Lewis showed that it slumped to an underlying pre-tax and bonus loss of £25.9m for the six months to July 27 - against profits of £800,000 a year earlier - as it said trading conditions had remained "difficult" and would continue to be challenging over its peak sales period.
The partnership said it was driven into the red by widened operating losses at its John Lewis department store chain, which increased to £61.8m from £19.3m a year ago as it suffered falling sales, surging costs of an IT overhaul and increasing cost inflation.
Like-for-like sales fell 2.3% across the department stores due largely to weaker demand for big-ticket home and electrical items.
Waitrose performed better, with underlying earnings increasing 14.7% to £110.1 million, though comparable sales edged 0.4% lower.
Mr Mayfield's comments came after the government was forced to release its "worst-case scenario" plan for a no-deal Brexit, codenamed Operation Yellowhammer.
It showed that no-deal could trigger medical shortages, food price rises and major cross-Channel trade delays.