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John Lewis chair has no regrets over Waitrose merger

John Lewis Partnership chairman Charlie Mayfield says he does not regret the decision to merge the businesses’ two arms together, as the company issues a profit warning and another key leader quits.

The group’s proposal announced in October, which is called “Future Partnership”, will slash senior management roles by a third and streamline operations by combining roles across department store chain John Lewis & Partners with sister supermarket Waitrose & Partners.

When asked if outgoing chairman Mayfield regretted the decision to merge the two businesses together after causing “a lot of commotion”, he said “not at all”: “The partnership is absolutely behind these changes and I’ve been enormously encouraged by the enthusiasm and the reaction that we have seen from within the business. We’re talking about people who know the business extremely well.”

He added: “This plan was not mine-hashed in secret, it was actually developed in detail and taken real consideration by the whole executive team, including Rob [Collins] and Paula [Nickolds], who are fully, fully supportive of doing it.”

“We’re clearly not just mashing together the two brands. There are indeed big differences between food and non-food, and we’ve kept the teams responsible for developing market-beating assortments very much the same as they were prior to the change.”

As part of the plan, there will no longer be divisional boards or separate managing directors for John Lewis and Waitrose. Instead, the executive team, led by chairman designate Sharon White, will comprise seven new director roles, which will be responsible for the whole partnership.

John Lewis Partnership announced this morning that managing director Paula Nickolds will leave next month as part of the programme. Nickolds joined the retailer in 1994 as a graduate trainee and was supposed to become the new brand executive director, overseeing both John Lewis and Waitrose in a newly created role she was due to take up in February.

Rob Collins will also step down as managing director of Waitrose & Partners this year.

Mayfield said the decision for Nickolds to step down was taken by both of them. He would not disclose whether she had been ousted from the business.

“Paula has been a brilliant leader of this business for many years,” he said. “We decided together now is the time to step away.”

Nickolds had been a rising star in the business. When asked about what had changed between October [when the partnership was announced] and January, Mayfield said: “Things change. People’s desires, people’s perspectives change. My perspective is that what we’ve done and what we’re doing is the right thing to do.” He did not disclose Nickold’s next move. 

When asked whether White will bring in anyone new to replace Nickold’s proposed brand role, Patrick Lewis, managing director of partnership services, who will become executive director of finance on 3 February, said: “What we announced in September was a restructure of the way we lead the partnership and, as a part of that restructure, the role of managing director was in any case going to no longer exist going forward from 3 February. There is actually no requirement to replace or succeed Paula as managing director of John Lewis.

“What we have got within the wider structure is a very carefully thought-through leadership team, which has strong and clear leadership around trading for food and non-food, our shop operations, in terms of supply chain systems, etc.”

He added: “What Sharon will do is decide what she wants to do in terms of providing succession for Paula in the brand role, which is for brand marketing and digital, and she will reach that decision when she’s ready from February.”

The partnership fell to a loss in the first half of 2019, as it warned of “difficult” trading conditions and “subdued consumer confidence”.

It said today that it would reverse those losses, but it warned that profits would still be “substantially down” on the previous year.

Mayfield said “I can’t say I’m proud of our profit performance this year”, claiming the retailer had been hit “because we are price competitive – we do match prices. Customers trust us for being price competitive.” 

Trading conditions are “tough and volatile” at the moment, he added. “Unfortunately, you can’t choose the weather. When the weather is fine, you make hay – and we did. You have to use the winter to sow the seeds for the next harvest.”

 

 

 

Readers' comments (1)

  • Department stores are a broken model. Given all the issues of HoF and Debenhams, you’d expect JL to benefit. Yet they didn’t.

    Reflected by similar results in USA.

    Selfridges, Liberty and Harrods are exceptions.

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