John Lewis Partnership Chairman Sharon White may have thought bringing in an outside investor could be key to some of its current problems, but the idea has sparked a major backlash and at the weekend, a high-profile industry insider accused the retailer of losing sight of what’s important.
Retail consultant Mary Portas wrote an open letter saying the operator of John Lewis and Waitrose is part of “our collective cultural identity” and has “let go” of its soul.
To recap, John Lewis has been struggling in recent years and despite annual sales adding up to billions of pounds, it has swung to losses and has been forced to scale back its physical stores.
After its latest results report this month, it said job cuts cuts would be coming, brought in a new CEO from the private sector and mooted the idea of ending its 100% staff-owned status by bringing in a sympathetic external investor in order to raise up to £2 billion.
Such a plan would require a change in its constitution and employee approval, as well as perhaps being difficult to achieve. Investors prepared to pump in large amounts of cash while having no control over the business and little say in how it’s run aren’t necessarily easy to find.
The Portas open letter via Linkedin said to the Chairman and new CEO Nish Kankiwala: “You are custodians of one of the most valued, loved, and trusted retail brands this country has… John Lewis and Waitrose are part of the fabric of every day British life. They’ve been synonymous with their values and trust for generations. Built on shared employee ownership, and shared accountability. John Betjeman wanted to be under your roof if the world came to an end because ‘nothing unpleasant could happen there’.
“So your task isn’t to turn around just another mediocre retailer under threat of going under. You’re fighting to save part of our collective cultural identity. But what’s worrying me is that you might think your fight is purely financial. It’s not.”
She also lamented the end of the “Never knowingly undersold” brand pledge, and complained that the new strap line “All life’s moments” is confusing.
And in a thinly-veiled criticism of the lack of direct real experience at the top of the business, she said that JLP has replaced many of the experienced “merchants” who are key to any retailer.
She contrasted the company to strong US peer Dillard’s with its resistance to “knee-jerk change” and its focus on retail above all else.
JLP meanwhile is diversifying, for instance with plans to move into rental properties.
“We know British brand history is littered with those who tampered with the crown jewels of their identity… British Airways clings on. Rest in peace Laura Ashley. And dear Woolworths” Portas concluded. “But failure for John Lewis and Waitrose is not an option. We can’t lose you too.”
The letter came a few days after White had penned her own open letter as a “message to our customers”.
In it she said “the Partnership will continue to evolve and change shape, as it has since its creation. What will remain a constant is our ownership of the business.”
She also emphasised customer trust, the strength of the staff-owned model, and how her role is to ensure “everything we do is in the best interest of the Partnership”.
