John Lewis to repay £300m Covid loan two months early amid resilient sales

John Lewis is to repay its £300 million UK government coronavirus loan ahead of schedule after festive sales were better than the retailer had feared.

John Lewis has department stores in Edinburgh, Glasgow, above, and Aberdeen. Picture: John Devlin

The John Lewis Partnership (JLP), which runs the department store chain and Waitrose supermarkets, said its finances are sufficient for it to repay the support funding – due to be paid on March 15 – early.

It comes as all its department stores, including its Scottish branches in Edinburgh, Glasgow and Aberdeen, remain shut in the face of the latest coronavirus lockdowns.

The employee-owned retailer, which remains open for online business, said trading over the peak Black Friday and Christmas sales period “held up better than expected” despite restrictions.

As a result, it expects full-year profits to be ahead of its previous guidance, when it predicted a small loss or small profit for the 2020-21 financial year.

JLP secured the coronavirus support loan after the UK government and the Bank of England set up the Covid Corporate Financing Facility (CCFF) at the start of the pandemic. More than 200 large businesses have borrowed money through the scheme, and many of them have already repaid their loans.

The partnership is to repay the loan, but its Waitrose business remains one of a handful of UK supermarket chains yet to volunteer to return millions of pounds in business rates relief.

In December, Tesco said it would hand back £585m from its business rates holiday, starting a chain reaction among rivals which saw around £2 billion repaid to governments on both sides of the Border.

Waitrose received around £120m of business rates relief for the year, according to estimates by property adviser Altus Group.

Earlier this month, JLP announced a number of tighter restrictions amid the second wave of coronavirus.

Click and collect services based within John Lewis shops were switched off to new orders, with the firm saying that in-home services would only be carried out if they were “essential to customers’ wellbeing”.

Marshals were positioned at the entrances of all Waitrose supermarkets to enforce the wearing of face coverings.

Staff, or “partners”, in Waitrose shops are now required to wear face coverings when behind protective perspex screens and in back-of-house areas, in addition to the other areas where this rule already applied.

Andrew Murphy, executive director, operations, said: “We are acutely aware that the country is at a critical point in the pandemic and are constantly thinking about how best the partnership and our partners can play our part in limiting the spread and impact of the virus.

“By insisting on the wearing of face coverings, over and above the social distancing measures we already have in place, we aim to make our shops even safer for customers.

“Meanwhile, we will reduce the range of services we are offering to carry out in customers’ homes, focusing only on those which are essential in order for customers to maintain their health and wellbeing and that of their families.

“We also want to help the national effort by removing reasons for non-essential travel, so we have decided to suspend click & collect services from our John Lewis shops.”

A message from the Editor:

Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions