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Sharon White gets set to live the troubled John Lewis dream | Business

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John Lewis will turn over a new leaf this week when its new boss, Dame Sharon White, formally takes the throne at the troubled retail group.

The position is only filled every decade or so, and White is only the sixth incumbent – and the first woman – in nearly a century. The crown will be passed by outgoing boss Sir Charlie Mayfield at an august ceremony at one of the retailer’s country piles, on the banks of the Thames in Berkshire.

The Odney Club is one of several properties at the disposal of the John Lewis Partnership’s 81,500 employee-owners. This one boasts its own conference centre in an idyllic setting said to be the inspiration for The Wind in the Willows.

Protocol will require that White sign a document promising to abide by the JLP’s constitution – a wide-ranging manifesto penned in the 1920s by its founder, John Spedan Lewis. Mayfield, meanwhile, after 13 years in the job, will sign his resignation letter in front of an audience of nearly 200 staff, some of whom entered a ballot to attend, with many more watching online.

The constitution has had several revamps over the years and the latest iteration, published this week, will tweak the pronoun used to describe the “chairman” – who is currently billed as a “he” throughout – to “they”. White was offered a choice of title and chose “chairman”, but presumably has drawn the line somewhere.

The 31-page document makes it clear the partnership’s ultimate purpose is the “happiness of all its members, through worthwhile and satisfying employment in a successful business”. The retail group also needs to make “sufficient profit from its trading operations to sustain its commercial vitality” and “distribute a share of those profits each year to its members”.

With dozens of senior staff being axed, profits in the doldrums and the prized annual bonus in jeopardy, the business in its current form is struggling to fulfil Lewis’s dream.

White, fresh from regulator Ofcom, is tasked with shepherding the group through a period of tumultuous change as it binds together the management teams of the John Lewis and Waitrose chains, which from now on are going to be run as one business.

Mayfield has already set the course for White to follow in his grand-sounding “Future Partnership” plan, which aims to save £100m over time. Instead of separate fiefdoms, the new executive team – which is still a work in progress – will work for both brands as they develop new products and services. The shakeup has resulted in a lot of collateral damage at head office, including the departure last week of Craig Inglis, the man behind Waitrose’s high-profile Christmas adverts.

The changes come at a time when profits at the department store chain have plummeted – down from £258m two years ago to probably less than £50m this year. Last month, Mayfield said he expected this to be the nadir: “I certainly hope this is where profits bottom out. This has been a time, in the last three or four years, of huge change, really putting [in] place the foundations for a period of renewal under Sharon’s leadership.”

Let’s hope so, because the group is also rowing back on transparency; it has stopped publishing weekly sales figures and will in future only provide updates every six months. Veteran followers of John Lewis worry that this is a passport to the past; it only opened its doors to the outside world around the millennium, ending years of quirky introspection. Yes, the data was closely watched by rivals and analysts as a barometer of the financial health of the middle classes, but the oxygen of disclosure – until recently, anyway – fuelled a long period of success.

The independent retail analyst Nick Bubb jokes that White should change the group’s name to the Waitrose Partnership: “The major problem she faces is that the department stores are making hardly any money and yet the supermarkets are still usefully profitable. This poses uncomfortable questions about the motivational value of the partnership bonus.” But the Waitrose chain will face its own Waterloo this year when its contract with Ocado ends and the home delivery specialist switches to Marks & Spencer.

An obvious place for White to start would be to shelve the “never knowingly undersold” price promise that has become a hindrance for John Lewis in an online, cut-price world: many shoppers would be willing to pay a bit more in return for decent customer service. Others point to the cost of the partnership’s bureaucracy with its hierarchy of committees. “Democracy costs a fortune”, says someone who knows the business well – and that’s before you get to the cost of maintaining its five hotels.

Bubb concludes: “There is now a big and overdue concentration on cutting central costs. The heady days of chasing top-line sales growth are well and truly over. The John Lewis Partnership has to become a more bottom-line focused organisation.”



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