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The factors behind Paula Nickolds' 'dramatic' exit

The ambiguity surrounding outgoing John Lewis & Partners managing director Paula Nickolds’ decision to quit “reflects badly on the business”, the fashion industry has told Drapers.

John Lewis Partnership announced yesterday that Nickolds will leave next month, following a restructuring under the retailer’s “Future Partnership” programme. The proposals announced in October will slash senior management roles by a third and streamline operations by combining roles across department store chain John Lewis & Partners and sister supermarket Waitrose & Partners.

Nickolds joined the retailer in 1994 as a graduate trainee and was due to take up the newly created role of executive director of brand, overseeing both John Lewis and Waitrose, in February.

Outgoing chairman Sir Charlie Mayfield said yesterday the decision for her to step down had been taken by both of them. He would not disclose whether she had been ousted from the business, or shed light on her next move.

In the wider industry rumours abound that she was forced to resign.

“Unless there were other issues we’re not aware of, her [exit] was a bit of a knee-jerk reaction,” one retail headhunter told Drapers.

Retail analyst Mark Pilkington agreed: “This is a very non-John Lewis thing to do – to plan to promote a long-term loyal person, and then [for her to leave suddenly]. It speaks of the degree of distress that must be reigning in the boardroom.

“[The downfall of John Lewis] is not all Paula Nickolds’ individual fault. She was doing some of the right things: putting more experiential events in the stores, improving customer service, emphasising the partnership model (which plays well with the ‘woke’ generation). The problem is beyond one person’s to fix.”

One retail executive headhunter agreed: “Paula is incredibly talented and bright, and has done an excellent job.”

However, she added: “As a result, I think she has done herself out of a job as the whole point to merge Waitrose and John Lewis is to cut costs, which makes total sense, but it means roles are also cut.

“I think Paula probably realised the executive brand role was actually a step back for her – a demotion. As the MD, she was running everything, so maybe she thought the brand role wasn’t really what she wanted to do.”

One former John Lewis Partnership employee agreed that Nickolds was likely to have had second thoughts about the new role.

She said: “Expecting Paula to work across a department store and a supermarket seems to be a big mistake. I would imagine, but obviously don’t know, that she would have reservations about making this a success, as would most people. The business models are so different.”

Retail analyst Richard Hyman commented: “Sir Charlie Mayfield indicated that it had been an iterative process and that he had the support of the senior team. He may well have at the outset.

“But somewhere along the road of those iterations, [managing director] Rob Collins (at the time they were announced) and Paula Nickolds (I suspect gradually over the past two months or so) have both voted with their feet and resigned. The ambiguity around her departure reflects badly on the business.”

Sources described yesterday as a “dramatic day” as a whole for John Lewis.

The retailer warned that profits would still be “substantially down” on the 2017/18 financial year, and that staff may miss out on a bonus. The last time this happened was in 1953. 

It also reported a drop in sales over the Christmas period. John Lewis & Partners’ 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.

Pilkington said: “John Lewis was always the gold standard of department stores, so the fact that they can’t make it work speaks volumes about the crisis facing the department store model. Virtually no one in the US/UK is doing well, apart from the destination luxury end, such as Harrods and Selfridges.”

Retail sources said John Lewis has a lot of work to do to up its profits again.

The retail executive headhunter said: “Sharon [White] needs to think what makes them special and different from competitors. Its price promise is haemorrhaging money for them, they need to look at values and principles for what the business stands for.

“They need to look at what brands they stock: own-buy doesn’t seem to attract customers as much as they hoped for – it’s becoming an M&S with loads of sub-brands.”

Hyman said: “John Lewis Partnership faces the most challenging moment in its history. 

“It is clear that in 2020 the market will get tighter and trading economics will be further squeezed. It will not wait for JLP to bed in a new way of working. Far-reaching decisions need to be made now and they must be right. Retail is unforgiving. No brand is owed a living. The Partnership needs to up its game, and quick.”

 

Readers' comments (4)

  • JL stands for expensive. 20% premium. Their focus on own label was flawed. JLAB ineffective. Sadly, none of which the fault of frontline partners.

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  • Senior management at JLP have always had a bit of a superiority complex to realise they have the same issues as all other retailers has come as a bit of a shock

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  • Own label strategy flawed, is an understatement. Yes, they make high margins, but on inferior, overpriced product. Their abandonment of Mr average, in a rush to attract new customers looks as if it isn’t working.

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  • Peter Ruis was the correct appointment...........

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