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Paula Nickolds sets out the future of John Lewis

John Lewis will attempt to increase in-house brands to 50% of its total product mix and encourage more customers to book one-on-one time with staff as it seeks to reinvent department store retailing, its new managing director Paula Nickolds said today.

Speaking to journalists at John Lewis’s headquarters in London, Nickolds set out a vision of the future in which shopfloor staff are trained experts in certain product categories, and customers can book consultations with them in stores. She said John Lewis does this already, but only in a “tiny way” – home design consultants and personal fashion stylists are available in some stores.

As John Lewis has previously stated, the role of its staff is changing. Back-end systems are becoming more automated and staff are being redirected to customer-facing roles, where they can add value. Nickolds confirmed there will be more redundancies this year as a result. However, she would not be drawn on how many staff would be affected.

Describing herself as a “shopping and design junky”, Nickolds emphasised her passion for product. In particular, she is throwing her weight behind the strategy of increasing the own brand mix at John Lewis. She revealed that John Lewis has set itself the target of increasing own brand to 50% of the mix – it currently sits in the “high 30%s” – although a timescale is yet to be worked out.

“This is in direct response to customers telling us they want more targeted, interesting and unique products,” she explained. “We have 1 million product lines, but breadth is no longer a differentiator.”

John Lewis launched its first in-house premium denim label called And/Or on 22 March. It followed the successful launch of premium brand Modern Rarity last September, which has been credited with boosting womenswear sales.

Nickolds acknowledged that it is a particularly challenging time in the industry, which is undergoing a “profound and structural shift” – echoing comments made in the past by her predecessor, Andy Street. “This is not the same business I joined 23 years ago,” she said.

However, she pointed out that John Lewis has always delivered more than just the opportunity to purchase goods. In the past, it has even provided golf lessons and, at one point, a harpsichord repair factory: “The list of things we can do to enhance customers’ lives is long.”

“We need to create experiences that bring people together,” she said. “The more digital we get, the more we use it to connect with people. Shops will not just be a route to sell things – they will offer relaxation and entertainment.”

Nickolds did not reveal the specifics of what John Lewis is doing to counter the rising costs resulting from the falling value of the sterling. However, she vowed that, in honour of its “Never Knowingly Undersold” policy, John Lewis would be “the last to move on prices”.

Sales at John Lewis increased 4% to £4.7bn in the 52 weeks to 28 January, but operating profit before the partnership bonus fell 7.5% to £231.4m compared with the same period last year.

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