RETAIL giant John Lewis Partnership is to pay its lowest bonus since 1953 and axe three Waitrose stores including one in Hampshire.

The group revealed a 23 per cent drop in profits and said it would cut its annual staff bonus for the seventh year running, to two per cent of annual salary.

Profits stood at £123m for the year to January 25.

Its Waitrose store in Waterlooville will close later this year along with branches at Four Oaks in the West Midlands and Helensburgh in Scotland.

New chairwoman Dame Sharon Wight, who took the helm last month, outlined a plan to return the group to profit growth, including “right sizing” its network of branches and slimming down its head office.

Dame Sharon said: “We need to reverse our profit decline and return to growth so that we can invest more in our customers and in our partners.

“This will require a transformation in how we operate as a partnership and could take three to five years to show results.

“We are stepping into a vital new phase for the partnership and I have no doubt we will come through it stronger.”

Dame Sharon – the former chief of communications watchdog Ofcom – said staff affected by store closures who wish to stay with the group will be “actively supported” to do so.

Last autumn, the company spent £3m turning its John Lewis department store at Southampton’s Westquay into an “experimental concept shop” with “experience playgrounds” on every floor.

The latest statement did not say how the initiative had gone.

She unveiled plans to invest in Waitrose online, ahead of its tie-up with Ocado ending in September, with plans to hire 2,400 new staff and build a new fulfilment centre in Enfield, north London.

She stressed that the group would remain employee-owned and would keep its two brands, John Lewis and Waitrose.

She said: “These are the most challenging but exciting times in retail for a generation.”

Results show the third consecutive year of falling annual profits, which came after like-for-like sales dropped 2.7 per cent across John Lewis department stores and 0.2 per cent at Waitrose.

This pushed the John Lewis chain to a £37m statutory loss, against earnings of £92.6m the previous year, while Waitrose put in a more robust performance with a 6.4 per cent rise in earnings to £211.9m .

While cutting the staff bonus, Ms White stopped short of axing it altogether despite her predecessor, Sir Charlie Mayfield, warning in January that employees may miss out.

Julie Palmer, regional managing partner at Begbies Traynor, said: “John Lewis’ fall from grace has been spectacular.

“Once the envy of the retail industry, the company has suffered dismal trading performances over the past few years, demonstrating that the retail race is so fast that even those seemingly on an unstoppable march one year can be vulnerable the next.”