John Lewis Partnership has forecast “significantly” lower profits for its 2019 financial year after Christmas sales fell, raising the prospect that it might not pay staff an annual bonus.
The firm, which runs the John Lewis department stores and upmarket grocer Waitrose, is an employee owned business which usually rewards staff with an annual payout equivalent to a percentage of their salary. The last time the Partnership did not pay a bonus was in 1953.
The company also announced that Paula Nickolds, managing director of the department stores, will leave in February.
Her departure comes as the department store reported a 2 per cent like-for-like sales slump in the seven weeks to January 5.
Ms Nickolds was supposed to become the new executive director of brand - overseeing both divisions of the partnership - in a newly created role which she was due to take up in February.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, who is also stepping down in February, said: "After some reflection on the responsibilities of her proposed new role, we have decided together that the implementation of the future partnership structure in February is the right time for her to move on and she will leave the partnership with our gratitude and best wishes for the future.
"At the full year, we expect profits in Waitrose & Partners to be broadly in line with last year. In John Lewis & Partners we will reverse the losses incurred in the first half of the year, but profits will be substantially down on last year. We therefore expect that partnership profit before exceptionals will be significantly lower than last year."
He added: "The partnership board will meet in February to decide whether it is prudent to pay a partnership bonus.
"The decision will be influenced by our level of profitability, planned investment and maintaining the strength of our balance sheet."
Like other department stores, John Lewis has been under pressure for some time, and in 2018-19 it reported a 45 per cent drop in profit, hurt by weak demand and rising costs.