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New John Lewis boss warns staff of store closures and job losses | Business

The new chair of the John Lewis Partnership has warned of potential store closures and job losses as part of a plan to shore up its finances.

Sharon White told this week’s private meeting of the employee-owned group’s staff council that it faced making “difficult decisions about stores and about jobs” during what was its “most challenging period” since its inception in the 1920s.

Despite the hard work of staff, trading results were disappointing and not generating enough profit to invest in the business, she told the meeting.

Decisions at the group, which includes department stores and Waitrose supermarkets, would not be taken lightly, White said, and the business would set itself apart from conventional rivals by showing “humanity” to staff affected.

White, who previously ran the media regulator Ofcom and is the first woman to chair the mutual founded by John Spedan Lewis, also told managers they needed to “improve the diversity of the partners we are hiring”.

Before Ofcom, the high-flying civil servant worked at the Treasury where she was the first black person to be a permanent secretary. A partnership that was “much more reflective of society” and its shoppers “will be a real boon for us”, she told the meeting.

White, whose parents were members of the Windrush generation, formally succeeded Sir Charlie Mayfield this week but has spent the past month touring the group’s stores and warehouses.

The handover comes at a difficult time for the group: profits at the department store chain have collapsed and staff – called “partners” within its democratic structure – have been warned they could miss out on their annual bonus this year.

The business has not shied away from store closures – last year Waitrose shut 12 unprofitable supermarkets with the loss of 1,100 jobs.

However, White struck a confident note about the group’s future, asserting that the partnership “is the business for our times”. In a hint of what her vision for the company might look like, she said: “We should be owning the ethical and environmental agenda. I think in 2020 the partnership values are more important than ever,” she said.

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“More than 10 years since financial crisis and as a country we are still asking: is business doing its role to create a good society, good jobs and decent pay?”

One of Mayfield’s final acts as chair was to announce a new company structure that has involved merging John Lewis and Waitrose, enabling them to be run more cost effectively by one eight-member executive team rather than two separate boards.

White said there was no “silver bullet” that would revive the company’s fortunes amid a sea change in shopping habits. The surest way to succeed was to “double down” on the partnership’s ethical business model that puts people before profit.

There were also easy fixes, she said. For example, botched orders meant the group spent £23m on goodwill payments to angry customers last year. If the retailer won back the biggest-spending customers it had lost, then profits would rebound by £100m, she said.

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