John Lewis Partnership, the owner of John Lewis and Waitrose, has reported a 75 per cent drop in profits for the six months to July, citing "deep structural changes in the retail market".
Half-year profits have sunk to £56.9m, down by £167.1m on last year.
The profits slump includes an exceptional charge of £25m for the write-down of property assets it no longer plans to develop for Waitrose.
But even excluding the exceptional charge, profits for the latest half year were down 14.7 per cent to £81.9m.
Sir Charlie Mayfield, chairman of JLP, said the fall reflects "market conditions" and "steps we are taking to adapt the Partnership for the future".
“We have grown gross sales and market share across both Waitrose and John Lewis, but our profits are down. This reflects market conditions and, in particular, steps we are taking to adapt the partnership for the future, " Sir Charlie said. "There are far-reaching changes taking place in society, in retail and in the workplace, that have much greater implications," he added.
Sir Charlie said the result of the EU referendum in June had no impact on its sales so far. Andy Street, John Lewis managing director, previously said the depreciation of sterling versus the US dollar in the wake of Britain's vote to leave the EU could potentially become a major issue for the company.
John Lewis is the UK's largest employee-owned business, which means that profits are shared between its more than 91,000 staff. Staff have seen their bonuses cut for the third year running to 10 per cent of their annual salary in March. The staff bonus fell to 11 per cent in 2015 from 15 per cent in 2014 and 17 per cent in 2013.
John Lewis is not the only high street name to have had a difficult few months. Primark owner, Associated British Food (ABF), said that like-for-like sales at Primark are expected to fall by 2 per cent over the year as warm pre-Christmas weather and a “very cold” March and April dampened performance. ABF also announced its pension fund has plunged into a £200m deficit from a surplus last year.
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