John Lewis is to permanently close eight of its 50 stores to “secure the business’s long-term future and respond to customers’ shopping needs”.
Amid falling profitability in recent years, rumours about the closure of some of the group’s underperforming sites have been circulating for some time. Last week, the partnership’s Chairman Sharon White warned staff that not all its outlets would return to trading after the coronavirus lockdown because of a cost-cutting drive.
The shops identified for closure include its two travel hub shops at Heathrow and St Pancras, four At Home outlets in Croydon, Newbury, Swindon and Tamworth, and two full size department stores in Birmingham and Watford.
John Lewis highlighted that the eight shops were already “financially challenged” before the coronavirus crisis and pandemic had accelerated the switch from shopping in-store to online. The group stated that before the virus struck, 40% of total John Lewis sales were online. However, it is now expecting this to rise to up 70% this year and next.
Around 1,300 staff are employed across the eight stores, with the company now entering in a consultation with those affected. John Lewis stressed that if redundancies are confirmed, it would try to find new roles where possible for those who wish to remain within the Partnership.
White said: “Closing a shop is always incredibly difficult and today’s announcement will come as very sad news to customers and partners.
“However, we believe closures are necessary to help us secure the sustainability of the partnership – and continue to meet the needs of our customers and wherever they want to shop. Redundancies are always an absolute last resort and we will do everything we can to keep as many partners as possible within our business.”
She added: “There are many reasons to be optimistic about the Partnership’s future. Waitrose and John Lewis are two of the UK’s most loved and trusted brands and we have adapted to the challenges of the pandemic by responding to the new needs of customers. We will soon announce the output of our strategic review which will ensure our brands stay relevant for future generations of customers.”
The announcement was made alongside confirmation of the final wave of John Lewis store reopenings. A further nine shops in Aberdeen, Ashford, Brent Cross, Chichester, Oxford, Peterborough, Reading, Sheffield and White City Westfield will reopen on 30 July. Leicester will also reopen when the local lockdown for the city is lifted, taking the total number of reopened to 42.
NAM Implications:
- Inevitable with a business model past sell-by…
- …especially in the current crisis.
- Suggested action for JLP:
- Focus on driving online
- Apply even more strict profitability hurdles for remaining stores
- Separate John Lewis and Waitrose business models for greater clarity and focus…
