As Dame Sharon White prepares to leave John Lewis Partnership, she can’t exactly say ‘job well done’. It’s more like ‘job half done’, with no real promise that the end goal will ever be reached.
In fact, only a month ago, the JLP chair revealed that her big five-year plan that she promised would deliver £400m a year in profits at the department store and grocery group, would be delayed by two years.
Meanwhile, the losses continue to rack up. At JLP’s recent half years, she had managed to narrow losses by a measly 14%, meaning that the group was in the red to the tune of almost £60m.
If the aim is £400m in profit, that seems a long way off.
Slow progress of a much-criticised plan
Of course, White has had a difficult run since she was hired as chair of John Lewis back in 2019, with a global pandemic and a cost-of-living crisis to contend with.
But she’s also had some things go in her favour too. The demise of rival Debenhams, which operated close to 170 stores across the UK, should have given John Lewis an open goal.
The collapsed department store turned over more than £2bn in sales. John Lewis should have hoovered up some of this, but very little of that custom appears to have gone its way.
Instead, M&S and Next, both of which have adopted more of a department store offer of late, adding beauty and more third parties to their mix, seem to be making gains.
Retail expert Jonathan De Mello, CEO of JDM Retail, says her departure comes as no surprise. “Under her stewardship JLP has been mostly loss making, and though the business has had to contend with both Covid and the cost-of-living crisis in that time, peers such as M&S have not experienced the same level of decline.”
Although White was unafraid to make some tough calls, such as closing 16 stores back in 2021, and has had some successes, such as the launch of John Lewis value range Anyday, her grand plan seemed confused and the lack of retail knowledge at the top was glaringly obvious.
The fact that White, a civil servant by trade that had previously led Ofcom, had no retail experience in one of the toughest markets the industry has ever seen has hurt the business.
And when senior retailers in her team – people like John Lewis boss Paula Nickolds and ex-Waitrose boss Rob Collins who held decades of experience at the business – quit not long after her arrival, she was left with a gaping knowledge vacuum at the top.
It’s notable that many of the big issues that JLP has been hit with in recent years, be it a lack of availability in Waitrose or making sure its products are competitive in terms of price across both retail brands, are very-much retail problems.
Her grand plan has faced much criticism, particularly its move outside of retail, such as its foray into housing.
In fact, White expects that 40% of JLP profits will come from non-retail activities over the next decade.
However, the financial viability of these schemes has been questioned after it emerged that one of the three housing schemes the business has in the works, the construction of more than 400 flats above a Waitrose store in West Ealing, could cost the company far more than its worth on paper.
Planning documents have revealed the development could result in a negative return of £57m.
De Mello says: “Much of the issues JLP face are of their own making – lack of direction at Waitrose, changes mooted to their unique partnership model, and an aspiration to become a property developer to name a few – and ultimately Dame Sharon is responsible for these.”
As De Mello says, the mere suggestion of changing the employee-owned structure of the partnership was a big strategic misstep.
The move, which has since been shelved, might have been well-intentioned, with the aim of raising more cash to invest in its transformation, however, to dilute the partnership showed a lack of understanding of what made John Lewis special, to customers and staff alike.
The move received widespread condemnation.
Former John Lewis boss and now Mayor of West Midlands Andy Street said abandoning the partnership model would be a tragedy for the business while Mary Portas said the retailer had “let go of its soul”.
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GlobalData Retail managing director Neil Saunders terms the move “ill advised” and says it hurt the morale of partners.
That is a big problem. JLP’s partners are the lifeblood of the organisation and the reason so many shoppers visit its stores.
They understand that they may pay slightly more at its brands but the service and advice they get is second to none.
After years of redundancies, no annual bonuses and the suggestion of diluting the partnership, JLP staff are demoralised and certainly not geed up to undergo a wide-sweeping transformation.
The fact that White narrowly survived a crunch vote earlier this year when the partnership council, made up of more than 60 partners, said it did not have confidence in the business’ performance under her leadership – although they did back her future strategy – speaks volumes.
What next for John Lewis Partnership?
White leaves a battered and bruised John Lewis Partnership, which despite many changes – notably the thousands of jobs axed – is no better off from a financial point of view than when she joined and appears somewhat rudderless.
The fact that White intends to stay on until February 2025 suggests she will continue pursuing her turnaround plan – though the two-year delay revealed earlier this year means she personally may not see it through.
However, De Mello believes the business should call time on her plan.
“One can only hope that whoever replaces her focuses on getting back to basics, with good retailing once again at the core of everything JLP does and stands for.
“The business very much can turn things around, which – sadly for Dame Sharon – will mean scrapping a number of the ideas she and her team have been trying to enact over the past few years.”
One thing is for sure, action is needed for John Lewis to course correct – and recapture what makes it special.
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She will walk off with a big bonus when she leaves for doing very little this is happening too much.
Too many board members and senior leadership have left with big pay-outs while the hundreds of partners who have been made redundant left with very little if anything at all, but were the heartbeat of the business but never listened to. Instead the board spent millions on consultants who haven’t delivered anything!
What comes next is easy, hire a world class multi channel retail leader
She should go immediately and not be paid. No bonus and should hand back the bonuses she was paid during her tenure. Why was a civil servant with no commercial experience given this job?
She was given the job because it was a woke, politically correct appointment Bob. The two top bosses who quit on her arrival must be feeling rather smug now.
M&S must be laughing their corporate heads off that she’s being allowed another year to do even more damage.
She has been extraordinarily well rewarded with little delivery of results (putting it kindly). A privilege not afforded to those at the bottom of the food chain. The business is in a far worse state than when she joined. As they marched ahead, M&S and its other rivals must be delighted!
Appalling mismanagement of a great brand. Closing stores like Birmingham were short sited and showed a lack of vision. Tired old stores and demoralised staff have ensured we’ve frequented the modern, on the ball M&S near us. A great shame JL and Waitrose haven’t been guided in the right direction, I only hope the next leader can reenergise the brand!
This is a warning to all the JLP staff. Heed the warning before it’s too late. Who ever takes over will inevitably cut jobs/ stores.
Only a civil servant trying to run a big business could possibly think that a retailer could switch to being a property developer. They should bring Mike Ashley in. It wouldn’t be pretty but it would have a better chance.
SW really does need to go now, with her strategic plan halted. Appoint two interim co-CEO’s, one for JLP and one for Waitrose from within the business, both who are highly regarded by board and peers alike. Two highly skilled trading retailers to steady the ship before a new Chair is appointed. The new Chair needs to be a highly strategic person with the very best of retail experience. Difficult to find one with department store and supermarket rexperience with the strategic mindset necessary. So, emphasis (imho), is on top retail and top strategist. A leader who can fill the role on behalf of ALL stakeholders, not least the Partnership people.
Imagine (just imagine…) that you hurt a business, a partnership, a Britain heritage, thousands of families, and hundreds of the best partners in business ( because they left as they couldn’t stand the current practices) and that person is only trying to pursue the bigger picture… Let’s see which company that person would go to work for, and let’s see if that business is it or if is it not related to the ones big profiters regarding the ‘vision’, the bad practices, the unusual, so many times highlighted, despicable decisions about retail.