UK retailer John Lewis' shop closures put 1,300 jobs at risk

[LONDON] John Lewis plans to permanently shut eight stores with the loss of as many as 1,300 jobs in a fresh blow to Britain's coronavirus-hit main streets.

The John Lewis Partnership, which also owns the upmarket grocer Waitrose, said it would be closing four At Home stores, two smaller shops at travel hubs, and two full-size department stores including one in Birmingham which opened less than five years ago. That will reduce its store count to 42.

The store closures and job losses are the latest to hit a retail industry that has been badly impacted by the pandemic and months of enforced store closures.

Last week Harrods Department Store announced hundreds of job cuts and a host of retailers, including Monsoon Accessorize, have carried out insolvency processes to shut stores and reduce debts.

While most stores have been open again since mid-June, fewer customer visits and lower demand are eating away at profits. Many retailers also face large rent bills and tax payments that have built up during lockdown, as well as higher costs of running stores safely.

John Lewis said the eight stores it is closing were "already financially challenged" before the pandemic, which has accelerated the switch from shopping in-store to online. "Before the virus struck, 40 per cent of John Lewis sales were online. This could now be closer to 60 to 70 per cent of total sales this year and next," it said.

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The partnership, which is co-owned by its employees, is planning to invest heavily in e-commerce for both the John Lewis and Waitrose brands to reflect the shift to online shopping.

Chairman Sharon White had previously warned in an email that job cuts were looming and said that the partnership may not pay a bonus to its employee-owners this year. It would be the first time there was no payout since World War II.

BLOOMBERG