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John Lewis Partnership plc Interim Report 2009


Chairman’s statement continued

We have ambitious plans for its accelerated development. We launched our new online fashion website at the beginning of September which will build to 100,000 lines in the second half, and we are trialling ‘Click and Collect’ with Waitrose.

We saw total sales growth of 2.2% in Fashion, offset by a decline of 2.5% in Electrical and Home Technology and 8.1% in Home, the area of our trade most directly affected by the housing market. In Fashion and Electricals we continued to win market share. All areas were underpinned by an excellent operational performance with record availability and further public acclaim for our service standards in winning the Which? and Institute of Customer Service awards.

Gross margin held up well despite continued price competition. Our commitment to ‘Never Knowingly Undersold’ is absolute. Indeed we are strengthening our price position by launching a new value range of products, improving our price matching process and extending the offer to include an emphasis on quality and service as key differentiators.

Our plans for the long term strengthening of the division are on course. As part of our £22.0m refurbishment programme in Bluewater we opened our second ‘John Lewis Foodhall from Waitrose’ in August which has been very well received by customers. We will open our new store in Cardiff in September and our new ‘at home’ format in Poole in October. Construction is also well under way on our new branch at the Olympic site in Stratford, which is scheduled to open in 2011. In June we opened our new distribution centre at Magna Park, Milton Keynes, which is already operating well. We have also launched our new magazine Edition.

Most importantly for Partners we continue to navigate the difficult decisions around ‘Branch of the Future’ and the Stevenage closure with great care. Taken together, these and the growth programmes position us well to serve our customers in the multi-channel future.

Greenbee

Greenbee continues to build scale with sales in the first half up 47.0% on last year, driven largely by growth in our Home, Car and Pet Insurance products and supported by broader marketing activity. We continue to look for ways to improve the online experience for customers and deliver improved conversion rates. Our Travel offer continues to be strengthened with Wine Tours and Gourmet Breaks, in collaboration with the Waitrose buying team, launched this month.