(on stage left to right) Simon Fowler MD of John Lewis Oxford Street and John Lewis partner Chloe … [+]
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I don’t know about you but there are some retailers for which I have always had a soft spot. Woolworths – for all their quirkiness, Beales – because my retail journey began there forty one years ago, and I would add Richer Sounds for their unrelentingly human approach to retail.
But there’s probably one which would top most people’s lists, and that is John Lewis. Because, together with Waitrose, it has established itself as not only the barometer of the high street, but one of the most loved and trusted of brands.
We love their Christmas TV ads, we love the fact that they are “never knowingly undersold” and we love the way they treat their staff, who as partners, all have a stake in the business.
But while our attitudes to the brand may not have changed, life in 2020 for John Lewis most certainly has. What are we to make of this? A bump in the road or an existential threat to their very survival? After all, nothing’s forever.
New Chairman
Perhaps the most obvious change happened this week at the very top of the organisation with the appointment of Dame Sharon White as chairman, succeeding the outgoing Sir Charlie Mayfield.
White brings with her an impressive CV, having worked at 10 Downing Street during Tony Blair’s years, at the World Bank, and as director general at the Department for International Development. Oh, and prior to joining John Lewis she was chief executive of Ofcom.
In other words, while extremely impressive, she does not possess a retail background.
But in appointing her, the Partnership has perhaps made a brilliantly inspired choice, retail has long needed to bring in new and different expertise as it transitions to the new world and White may just be the person to effect the necessary change at John Lewis.
Culture
However, she is not exactly assuming the helm of a steady ship, for it is currently navigating what can only be described as rather rough waters, not only in the face of external forces but, more worryingly, internal stresses.
For many a year, the partners at either John Lewis or Waitrose have been just that, partners at two separate businesses, now brought together, somewhat reluctantly it has to be said, under one roof.
And the legacy which White’s predecessor has left her is of one very challenged business, the previous two boards now joined together as one, amidst serial cost-cutting of the management layers.
Perhaps it will save £100 million but at what cost?
Performance
Our much loved bellwether of the high street has not, of course, been immune from the pressures facing everyone on the high street, and those heady days of 15% bonuses for the partners must seem a long way off.
Such has been the relative decline, that last week, John Lewis published its very last set of weekly sales figures. Something which had been albeit an anomaly but nevertheless, a welcomed tradition for many a year.
However, a glance at the very last published figures reveal just why we will see them no more, for they don’t make for pretty reading.
The very last published John Lewis weekly sales figures
John Lewis
Trade Deal
There are probably enough column inches on Brexit, if printed, to take us to the moon and back, but one thing is unavoidably clear, Brexit is far from done. And the trade deal which we negotiate with the E.U. could have a material impact on not just John Lewis but all U.K. retailers.
Tariffs, quotas, zero-zero tariff agreements – we’ve only just begun to test the water with all of these, but one thing is clear, a Canada-style agreement is not only fanciful but unrealistic.
Will retail be sacrificed in favor of the strength of the U.K.’s banking industry? Only time will tell.
Rising Costs
Perhaps to complete the perfect storm impacting John Lewis, is the thorny topic of rising costs.
Whether it be the national living wage, apprenticeship levies or business rates, the fact remains that John Lewis has some pretty heavyweight property and in the case of the latter, it appears, despite Boris Johnson’s pledges, that the government is still blind to the negative impact that the current system of business rates is having on retail.
It’s a seminal time for one of our most loved and respected retailers, I’m sure I’m not alone in hoping that their new chairman, Sharon White, can successfully navigate her fellow partners through the undoubtedly rocky times which lie ahead.
U.K. retail needs a healthy and thriving John Lewis, my only hope is that the partners play nicely together in their new playground. After all, much is riding on it.
