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John Lewis closures ‘needed’ for future-proofing

“Juggernaut” John Lewis Partnership is wise to follow the lead of other high street retailers and right-size its portfolio, industry experts have told Drapers.

John Lewis Partnership’s new chairman Sharon White warned in a speech to staff last week that “difficult decisions” lie ahead on store closures and job losses. White said the retailer was facing the most challenging period since it was founded in 1905, but promised decisions on store closures would not be taken lightly.

The director of one retail property consultancy said White’s appointment was a “catalyst for the closures”: “Before [outgoing chair Charlie Mayfield] left, he integrated the two businesses [John Lewis & Partners and Waitrose & Partners] as part of a cost-saving programme, but the company has realised it needs to find more ways of cutting costs. Perhaps it has been waiting for her to come on board to announce it.”

He added: “The closures are part of the ongoing structural changes in retail. They are needed, but they won’t and don’t need to be deep. Only a [few] store closures would be optimal. Those that will close will likely be the smaller ones in secondary high streets in small town centres as opposed to bigger malls and cities. 

“[They] are underinvested in and not doing the levels of turnover they’d like to be doing.”

One brand stocked in John Lewis said the decision is “probably a good thing”: “They’re doing everything every single business is doing. Every traditional business needs to look at how it is structured for the future – even a huge business and juggernaut like John Lewis. Businesses, including their store portfolios, need to be reinvented. If people aren’t doing it, then that’s more of a concern.”

Another retail property consultant said: “We don’t know how many closures will be Waitrose or John Lewis, but I think it will steer more towards Waitrose as they’re generally shorter leases. Even if only a handful of stores shut, that’s still a lot of space and a lot of jobs to go at one time.

“I don’t think it matters who you are at the moment. John Lewis, Primark, Debenhams or House of Fraser, they all have the same problems [with property costs] and are all hurting. They’ve braced themselves for job losses and closures, but [the question is] when will it start?”

John Lewis gross sales dropped 2.3% to £1.1bn between 17 November 2019 and 4 January 2020, year on year, and were down 2% on a like-for-like basis.

John Lewis declined to comment. 

Readers' comments (2)

  • Integrating. Closing. New supply chain.

    A lot of internal challenges all at the same time. Good luck.

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  • darren hoggett

    John Lewis are indicative of the larger players - they all think stores closures need not be deep, when in fact, the reverse is true. It's more 'wing and a prayer' than basic economics, as physical stores will not turn around, bar the odd blip.

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