New John Lewis chair warns on possible store closures, job losses
Sharon White has only been in her post as chair of John Lewis Partnership for a few days but she's already warned that the operator of the John Lewis department stores chain and of Waitrose supermarkets is facing its toughest decisions in almost 100 years.
She told a meeting of the staff council that the firm needs to make “difficult decisions about stores and about jobs” and that its results haven’t generated enough profit to allow the company to invest in growing its business.
But given that John Lewis is unusual in the global department stores and supermarkets sectors in that it's owned by its employees, she also emphasised that the company will continue its ethical business model. And she said any staff affected by the difficult decisions to come would be shown “humanity”. The news was originally reported in The Guardian.
The company owns over 50 John Lewis stores and 338 Waitrose locations with 80,000 people working for the firm. Given the larger number of supermarkets (and convenience stores) it owns compared to department stores, it could be that most cuts would come in this area. Last year the company closed loss-making 12 supermarkets and shed 1,100 jobs. That said, it’s the department stores that are struggling the most at present, although these are much larger locations and closing any of these would be a big move.
Meanwhile, White also said the company must “improve the diversity of the partners we are hiring”.
The retailer been struggling to ignite sales growth in recent periods and while it's suffered nowhere near as badly as mid-market department store peers House of Fraser, Beales and Debenhams, it's clearly at a crossroads and need to do something to boost its turnaround.
But White also said there are some areas that are relatively easy to fix. She cited botched orders that cost the firm £23 million in goodwill payments to customers last year and also said winning back lost high-spending shoppers could add £100 million to its profits.
There’s still some scepticism about her ability to turn the firm around, however, given her lack of retail experience and the recent exit of a number of senior team members including Waitrose boss Rob Collins, John Lewis boss Paula Nickolds.
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