John Lewis recorded a pre-tax loss of £517 million in 2020, compared to a pre-tax profit of £146 million in the previous year.

The retailer warned that because of significant losses, it is unlikely to reopen all of its stores once lockdown restrictions are lifted.

The company said that profit decline was the result of substantial exceptional costs of £648 million triggered by the shift to online, alongside restructuring and redundancy costs from store closures and changes to its head office.

Although Waitrose, which is owned by the department store, saw improvement due to the closure of the hospitality industry, this wasn’t enough to cover the losses as non-essential stores closed under lockdown restrictions.

Profit before exceptional costs was £131 million, up £61 million on the previous year. But the company explained that it would have made a loss before exceptions if it hadn’t been for crisis support from the government.

The government helped John Lewis out with £190 million, made up of both business rates relief and furlough support.

“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” said Sharon White, John Lewis partner and chairman, in a company statement. “Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain.”

John Lewis is currently in discussions with landlords about closures and it expects final decisions to be made by the end of this month.

The company said that with retail margins declining, it hopes that by 2030 40 per cent of its profits will come from areas outside retail, including financial services, housing, and outdoor living.

The retail also plans to reshape its store estate by creating destination stores, smaller service stores, bringing Waitrose and John Lewis brands closer together, and improving Click & Collect services.

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