John Lewis witnessed bumper Christmas sales leading to profit surge and it is expected more bonuses could be on the way for the workforce. Last September it was stated bonus would be followed by profits of more than 150 million pounds. However, independent retail analyst Nick Bubb said it seems enough cash is available to pay the bonus, but it would be worst if the bonus is not paid again next year.
A leaked memo reveals that 80,000 employees may receive an annual bonus in March and this would be for the first time since 2020. The bonus was canceled in 2021 for the first time in the 67 years history of the retail giant that is owned by staff and the company calls them partners.
The financial performance statement is scheduled to be issued next month and the board may take a decision on the bonus in early March. The efforts of Chairwoman Sharon White seem to have started bearing fruit. She took the charge in 2019 and had to slash down the annual staff payout in order to fund her turnaround strategy of launching a housebuilding arm and shutting of shops.
Executive director for finance Berangere Michel said there is a possibility of payout as the performance of the company had been a superb achievement over the Christmas period. Her view has a considerable weight as she looking after the finance part of the company.
Michel said John Lewis is ahead of the annual profit target of 100 million pounds by the year-end and a month is still left for the financial year. The company has always been an attractive employer and the bonus is considered a key mark in the mutual ownership structure. The bonus peaked in 2013 with a payout of 211 million pounds, which was about 17 percent of the annual salary of the employees.
The company made a profit of 131 million pounds in 2021, but losses of 517 million pounds were racked up when redundancy costs from store closures and other exceptional items were included.
John Lewis is targeting a profit of 400 million pounds by 2026. However, it is not to forget that the shopper visits to its stores were reduced due to the recent Omicron outbreak and festive sales were hit by shortages of products due to the supply chain problems.
Michel added that the company is targeting savings of 300 million pounds by the end of the next financial year.
However, new pressure can be generated with improved performances to hand back government subsidies that were handed to the company during the COVID-19 pandemic.