LONDON (Reuters) - Britain's John Lewis Partnership [JLPLC.UL] reported an 99 percent slump in first-half profit on Thursday, as it was hit by price matching in its department stores and a shift towards sales of lower-margin electronics from big-ticket home items.
The employee-owned group, which rebranded its department stores John Lewis & Partners and its supermarket chain Waitrose & Partners last week, made profit before exceptional items of 1.4 million pounds ($1.82 million) for the six months to July 28.
The partnership had already warned in June that first half profits, which are always much lower and volatile than the second half, would be close to zero.
It said it expected its full-year profit to be "substantially lower" than last year for the group as a whole.
Waitrose was on track to grow profit for the full year, driven by a improvement in like-for-like sales from the first to the second quarter and progress in rebuilding its gross margin, it said.
But the growth would be offset by continuing pressure in its department stores and the cost of investing in the business.
Profit at John Lewis's 50 department stores and home shops was squeezed by its pledge to match rivals' prices on a fiercely competitive British high street.
Competitor Debenhams <DEB.L> has issued a string of profit warnings and last month House of Fraser was bought out of administration by Sports Direct <SPD.L>.
John Lewis Partnership Chairman Charlie Mayfield said the group was "not hunkering down and going on the defensive".
"You don't succeed by retrenching so if anything we are investing more and pushing on with differentiation," he told BBC radio.
"The simple truth is that times like these call for cool heads and really determined ambition."
($1 = 0.7673 pounds)
(Reporting by Paul Sandle and Andrew MacAskill; editing by Sarah Young)