John Lewis bosses are considering plans to keep some of the company’s locked-down department stores closed for good, according to reports.
The 155-year-old retailer had to shut all 50 of its UK stores for the first time ever as part of the nationwide social distancing restrictions imposed on 23 March to curb the Covid-19 coronavirus outbreak. Johnlewis.com has continued to operate, alongside Waitrose supermarkets and Waitrose.com.
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What is going on?
The proposal is understood to be part of “radical plans” by the partnership’s chair, Sharon White, to “accelerate strategic changes in response to coronavirus”, says The Times.
White has previously spoken about plans to increase the group’s services business “as bricks-and-mortar retail continues to suffer from a shift in shopping habits to online”, explains the newspaper.
One option is to bring in an outside investor to help finance a joint services venture to reduce the current reliance on retailing, with speculation about a possible move into financial services or technology-linked services.
A spokesperson said: “A non-negotiable is that we remain an employee-owned business.”
What has happened since the coronavirus outbreak?
John Lewis last week reported a 17% year-on-year drop in sales since the outbreak took hold. And although online orders were up 84% year-on-year since mid-March, “shoppers are buying small items such as Scrabble games that are far less profitable than a sofa, for example”, according to The Telegraph.
The chain’s “woes were too great to be offset by an 8% increase in sales at Waitrose year-on-year since 26 January”, the newspaper adds.
So will John Lewis stores close permanently?
Partnership chair White has launched an assessment on whether to reopen all John Lewis stores after the lockdown. The business is also reviewing whether its retail space could be reduced, with possible measures including handing back a floor to landlords in some of its larger stores, relocating shops or putting Waitrose food halls in John Lewis stores in order to increase footfall.
The Times’ retail editor Ashley Armstrong says that with the department stores closed, it is easier for White to make “cold, hard decisions on how many John Lewis shops are needed, or what size they should be”.
Armstrong confirms that “well-placed sources say that some sites may not reopen after the lockdown is lifted”.
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When will the other stores open?
The reopening of John Lewis stores is expected to be staggered.
The partnership’s executive director of operations, Andrew Murphy, who has led the crisis strategy, told The Mail on Sunday that the group had a “portable” plan in place for when the government says restrictions can be lifted.
This would involve reopening stores in a minimum of three tranches.
“Even in a scenario where we are theoretically able to open all our shops on the first day, we wouldn’t do that,” he said.
For example, stores that have large car parks - giving staff the option to drive to work and avoid public transport - might be first to open.
Murphy added: “We’re also really mindful that public sentiment has changed and big business will need to prioritise health and safety above all else. There will be no headlong rush to get our shops open just because we can.”
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