Waitrose-owner John Lewis Partnership warned that some of its department stores would close down permanently after record costs and shop closures pushed the business to an annual pre-tax loss on Thursday.
The group, which operates 42 John Lewis shops, permanently closed eight stores last July impacting 1,300 jobs, as it grappled with the fallout from the pandemic.
'Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,' the company said, adding that it was in talks with landlords, with final decisions expected by March-end.
Chairman Sharon White described the situation as "the greatest scale of change in the Partnership's 156-year history."
John Lewis shops are now held on its balance sheet at almost half the value they were before write downs this year and last, it added.
The employee-owned group said the outlook is uniquely uncertain as the country charts its exit from the latest lockdown, adding that 'no one has a crystal ball to predict the strength and pace of the recovery - or the future course of the virus'.
It reported a pretax loss of £517 million ($720.85 million) for the year ended 30 January, compared with a profit of £146 million, hurt by exceptional costs of £648 million from the write down in the value of John Lewis shops amid a shift to online retail.
It also included restructuring and redundancy costs from store closures and changes to head office.
However, it posted a profit, excluding items, of £131 million, compared with £61 million last year.
The company plans to invest £800 million this year for its turnaround and expects liquidity, debt ratio and profit before exceptionals to worsen in 2021 and 2022 and then improve in later years.
It is also targeting a £300 million a year cost reduction by 2022 and 2023 and intends to accept business rates relief from April to June.