John Lewis plans store reopenings, mulls services joint venture

By

Sandra Halliday

Published
Apr 27, 2020

The John Lewis Partnership is working on its reopening plan but is also said to be considering a future that’s substantially different from its past with talk of an outside partner being brought in to finance a big move into services and away from such a strong reliance on retail. 

At present, the partnership’s chain of Waitrose supermarkets remains open but all 50 of its John Lewis department stores are closed.

The company is reopening its textiles factory (which usually makes home furnishings) to make clinical gowns for the NHS, and is also working out how its department stores can make a comeback.

Executive director of operations Andrew Murphy told the Mail on Sunday that those stores could start to open in mid-May, although the company is still dependent on getting the go-ahead from the government to do so.

He also said that a full reopening would take between three and six weeks to complete with the firm working on various scenarios that would see different sizes of shops opening at different times. 

Around 20 of its shops have large car parks and are less dependent on crowded public transport for its staff to get to work, so these would be likely to open first. The big flagships such as its Oxford Street store in London and others in key cities would be likely to be among the last to reopen.

But in addition to reopening plans, there’s also talk that the group could permanently close some of its less viable department stores following the lockdown. Such a move is already being seen at department store rival Debenhams, which is currently operating in administration and has just announced additional store closures.

RADICAL PLANS

John Lewis hasn't made any announcements, but a report in The Times on Monday said that still-new John Lewis chair Sharon White is looking at a number of radical plans for the company and wants to speed up change in response to the coronavirus.

The company is believed to be considering bringing in an outside investor to back a joint-venture that's all about services rather than retail. John Lewis already offers a certain number of services, such as curtain fitting and repairs, but is believed to be considering a much bigger move into this area.

However, any big move involving new finance wouldn’t be straightforward as the John Lewis Partnership is actually an employee-owned trust and therefore can't take the same actions as some privately-owned or publicly-listed companies could. The company would be unable to invite any outside investors to take a direct ownership stake in the firm, which is why a joint-venture (such as it has had with Ocado for grocery delivery) would be the most likely option.

There’s an urgent need to find long-lasting solutions to John Lewis’s problems. Although more successful than mid-market department store peers such as Debenhams and House of Fraser, the company that was once seen as unstoppable, has faced major challenges in recent periods. While its fashion business continued strongly before the coronavirus crisis hit, its crucial interiors offer was struggling. This led to challenges on the sales front and plunging profits. 

A restructuring designed to deal with this under Sharon White’s predecessor Charlie Mayfield saw the Waitrose and John Lewis operations being brought closer together, but also led to the exit of key business leaders such as John Lewis’s Paula Nickolds.