John Lewis Partnership warned today that sales at its department stores division could crash by 35% this year in a worst case scenario for the coronavirus crisis.
The employee-owned group, which also owns the Waitrose supermarket chain, also said it would accelerate a strategic review that new chairman Sharon White launched in March.
The partnership said sales at its department store business had fallen 17% year-on-year since the middle of March and were down 7% since January 26 - the start of its 2020-21 financial year.
Its 50 John Lewis stores have been closed since March 23, a day before Britain went into lockdown to try to stop the spread of the virus, but its online operation has continued to trade, with its sales up 84%.
The group said the highest demand has been for products linked to working and living at home like technology and food preparation but also in looking after and entertaining children and keeping fit.
But it said these tended to be less profitable products.
"We are buying more Scrabble but fewer sofas," said Chairman White, who along with all other directors has taken a 20% pay cut.
To preserve cash, the company has also lowered planned stock intake, reduced marketing spend by £100m, cut capital and investment spend by £200m and temporarily laid off 14,000 employees, which it calls partners, under the UK government's scheme.
The group is also negotiating with landlords regarding rent relief, including a switch to monthly from quarterly payments.
The company's worst case scenario for the full year assumes significant sales decline between April and June, and weak sales thereafter.
Waitrose sales are up 8% since January 26, benefiting from strong demand for food both before and during the lockdown.
It said demand for home delivery has been especially strong and it has increased capacity by 50%, raising operating costs.
Under its worst case scenario Waitrose's sales would fall less than 5% over the full year.
The partnership has £900m of cash and investments in the bank and access to a further £500m of undrawn committed facilities to help get it through the crisis.
White said the UK government's 12-month business rates holiday would save the group around £135m.
In early March, before the severity of the outbreak was known, White warned it could take up to five years to revive the group. Her review will now be substantially complete by the summer.
"It will seek to take account of changes in consumer behaviour to come out of the pandemic, such as a more pronounced shift to online and a desire to shop in more sustainable ways," she said.
