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Seven things we learned from John Lewis's annual report

John Lewis Partnership published its annual report yesterday, following up from its results last month, when it reported a drop in pre-tax profits to 62.7% for the 12 months to 27 January.

At the time Sir Charlie Mayfield said the group would continue to invest and “step up” to the challenging market, and the annual report reveals more about how it will do that.

1 Inspirational fashion

John Lewis said fashion – particularly womenswear – is of strategic importance to the business and central to its ambition to build a £500m own-brand fashion business. During the last year, it launched its first in-house denim lifestyle brand for women – And/Or – and introduced a collaboration with Eudon Choi as part of its in-house luxury label, Modern Rarity. Own labels are John Lewis’s top-selling fashion brands in both men’s and women’s wear. Contemporary lifestyle brand Kin also increased sales by 7% last year.

2 Value-add customer service

The retailer said sales staff will play an even greater role in delivering a value-added experience for its customers. Part of this was the launch during the year of “experience desks”, where customers can book the experiential and ”concierge-style” services offered in store, such as personal styling for men and women, beauty and grooming treatments, and tables in its restaurants. The experience desks were rolled out to five branches.

In addition, the retailer said it would increase staff pay to an average of £9.16/hour, following its April 2018 pay review. It will also improve staff training and development opportunities, including bolstering the number of apprentices from more than 350 last year to a further 500 in 2018/19.

3 Sustainable sourcing

John Lewis said it planned to increase the proportion of sustainably grown cotton in its supply chain to 12%, by focusing on key homeware suppliers. Both Waitrose and John Lewis are also making progress in addressing the key human rights risks in its supply chains, along with increasing transparency. It has released a list of home, fashion and accessories suppliers as part of the Clean Clothes Campaign Transparency Pledge.

4 Head office restructuring

The retailer said it had simplified its head office organisational structure, moving from divisional to partnershipwide support functions across IT, personnel, property and finance. It said this had simplified ways of working across different parts of the business, and there would be further benefits in 2018.

It said: “Changes like these are hard for all of our partners, and we’d like to thank [them] for their contribution and professionalism.” 

5 JLab innovation programme to run throughout 2018

The John Lewis Partnership retail technology accelerator programme JLab will run throughout the year for the first time, and add further activities to help encourage innovation and new ideas. John Lewis invites start-ups to apply for the JLab programme with business ideas that could change the face of retail shopping. In 2017, it received 208 applications – the largest number of entries since its launch in 2014.

6 Disability pledges

John Lewis said it was working with the Business Disability Forum to ensure its company environment is disability friendly. In 2017, it achieved its aim of being a Disability Confident Employer, as recognised by the Department for Work and Pensions. John Lewis said it was proud to be the retail industry representative on the Disability Confident Leaders Group and is committed to achieving its goal of becoming a Disability Confident Leader in 2018.

7 Reducing greenhouse gas emissions

The retailer’s environmental strategy includes reducing carbon emissions and energy consumption associated with its buildings, along with finding more efficient ways to distribute its goods.

John Lewis said: “By innovating and investing in our buildings, and through procuring renewable electricity, we have seen our greenhouse gas emissions fall. As a result, we have already achieved our target of a 65% reduction in carbon intensity (tonnes per £m of revenue) against a 2010 baseline.”

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