John Lewis warns on pound and calls for clarity on EU workers

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The boss of John Lewis has sounded the alarm over the pound’s Brexit-induced freefall against the dollar, and called for clarity on the future of European migrants working in Britain.

Andy Street today said the department stores chain had so far seen “no implication for sales” from the Leave vote.

He added that the “big issue” was the sterling-dollar exchange rate, which has plunged to a 31-year low since the referendum.

Speaking at its flagship Oxford Street store, Street said John Lewis was hedged for this year but said risks remain as there is “no real certainty”. He added: “It can never be that simple because you don’t know where cost inflation comes through from other things that are imported. It’s not as simple as just the products you buy.”

“At the moment, this is a political crisis, it’s not an economic crisis. But one could turn into the other if not properly handled.”

Andy Street

The company has hedged a “good proportion” of its foreign exchange for the first half of its next financial year but “a lot less” for the second half. 

John Lewis imports about two thirds of its goods, about half of which is priced in dollars.

Street also appealed to the government to prioritise a decision on the future of EU migrants in Britain: “The thing we would like above all else is clarity on that.”

The latest sales figures, which rose 2.1% in the week to July 2 after a 7.3% increase a week earlier, were not indicative of a Brexit slowdown but reflected a change to the start of its clearance sale, Street said.

The group is on track to grow sales by 5.3%.

“At the moment, this is a political crisis, it’s not an economic crisis. But one could turn into the other if not properly handled.”

For the moment, however, there would be no change to John Lewis’s planned investments, including refurbishments of beauty halls.

“If we are into tougher times, it’s our model, our ability to do things that are counter-cyclical and possibly even counter-intuitive that will see  us through.”

Source Article from http://www.standard.co.uk/business/john-lewis-warns-on-pound-and-calls-for-clarity-on-eu-workers-a3291326.html

July 8, 2016 |
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