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The Guardian - UK
The Guardian - UK
Business
Anna Isaac

Ex-boss urges John Lewis not to change staff-ownership model

Andy Street, then managing director of John Lewis, is pictured in the flagship Oxford Street branch in 2015.
Andy Street, then managing director of John Lewis, is pictured in the flagship Oxford Street branch in 2015. Photograph: Graham Turner/The Guardian

It would be a tragedy if John Lewis were to change is staff-ownership model, a former boss of the retailer has said.

The familiar high street name, which is part of a partnership that includes the supermarket Waitrose, has been wholly owned by its employees since the 1920s. The business model could be under threat as bosses consider bringing in outside investment of up to £2bn for a minority stake in John Lewis.

“It would be a tragedy if that occurs,” said Andy Street, the West Midlands mayor who was the retailer’s managing director from 2007 to 2016.

“I think John Lewis goes a bit beyond a shop,” he told the BBC One’s Sunday with Laura Kuenssberg show. “You can buy the same television from other places is the truth. But John Lewis was about, actually, a way of doing business. Actually showing the market there was a better way of doing things.”

Sharon White, the chair of the John Lewis Partnership, moved to reassure workers this week that no change to the ownership model had been determined – yet. However, she has already warned of job losses, saying: “Inflation hit us like a hurricane.”

The company made a worse-than-expected £234m full-year loss, with staff missing out on their annual bonus.

Employees have laid much of the blame for the business’s struggles on the current leadership. In a poll carried out on Thursday, 85% of partners, the term used for John Lewis’s owner-workers, who responded said they were not confident in the company’s ability to deliver its strategy, according to the Sunday Times. John Lewis said less than 2% of staff took part, which would equate roughly to 1,000 individuals.

In comments on the firm’s intranet, staff aired their frustration, with one warehouse coordinator calling the company’s performance “an absolute disgrace”, the Sunday Times reported. Meanwhile, a Waitrose cheese specialist said: “Is Sharon White taking the responsibility for this loss? She is heading it [the company] … Submit your resignation and go away.”

Bosses at the business should find a way to show, as other retailers such as Next and Selfridges have, that there is a way to survive in the tough world of modern online and offline retail, Street urged.

“I would urge the leadership of John Lewis to think about what’s really at the heart of it, what makes it special, and hold on to that,” he said.

Street’s remarks echoed calls from retail experts to consider a range of options for reviving the troubled business. Mary Portas, who advised David Cameron on the future of high streets, warned that the battle was not only about the bottom line, but also saving a brand.

“What’s worrying me is you might think your fight is purely financial. It’s not,” she said. “The battle in hand is far more nuanced. It’s about what makes up the soul of your brand. The intangibles, the shared beliefs, the beautiful things that can’t be captured in financial projections but earn a little space in people’s hearts.”

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