John Lewis Partnership Chairman Dame Sharon White steps down

The Chairman of the John Lewis Partnership, Sharon White, will step down from the business next year, it has just been announced.

As White enters the latter stages of her five-year term, she will not seek to renew her role for a second term, making her tenure one of the shortest in the firm’s history.

White has announced she will be stepping down following a reported loss of £234m last year, forcing the Partnership to scrap the annual staff bonus. 

She had been spearheading a turnaround strategy at the loss-making business, which owns department store John Lewis and upmarket grocer Waitrose, but this involved shifting the focus away from retail and into completely new category areas, such as property. 

WHEN A TURNAROUND STRATEGY GOES WRONG

As part of this strategy, the company planned to construct 400 flats above a West Ealing Waitrose, alongside two other housing scheme projects. But the group was recently said to be facing “extreme challenges” on this flagship property scheme, reportedly being told that the turnaround project will cost more to build than it’s worth on paper. 

Planning documents are understood to have revealed that the West Ealing development could result in a negative return of £57m for the business, with property consultants calling “the financial viability of the scheme extremely challenging”.

Critics of Dame White’s strategy over the last few years say the Partnership should focus on elevating the qualities it is best known for, such as great in-store service and expertise at John Lewis, rather than getting distracted with projects that have little synergy with its core retail offer.

In 2020, White embarked on a store closure programme at John Lewis, amid a shift to online shopping, which was accelerated by the pandemic. Online trading represented three-quarters of the department store’s trading in March 2021 and the closures indicated White’s belief that this won’t change when stores reopen once again.

However, she couldn’t have been more wrong. We saw a resurgence to physical stores when they reopened after Covid-19 restrictions were lifted, as well as online sales returning to their pre-pandemic trajectory. 

Not only that, but the soaring cost to do business online, as well issues around delivery and returns, has meant many multi-channel retailers are now encouraging in-store ‘delivery’ options, such as click-and-collect, which are much better for margins. But this is much harder to do when you’ve chopped your store portfolio in half.

White’s appointment, which was announced in June 2019, surprised many in the industry at the time as she hadn’t come from a background in retail. This is in stark contrast to Marks & Spencer CEO Stuart Machin, who is successfully leading a turnaround strategy at the high street retailer after working his way up the business from the shop floor.

FURTHER READING:

Strategy: Turnaround finally pays off at M&S>

M&S profits better than expectations as turnaround strategy in full swing>

In a statement, the John Lewis Partnership said White has today asked the Partnership Board to initiate the process to appoint a successor as she enters the latter stages of her five-year term.

As part of the recruitment process, she has also asked the Board to review the accountabilities of the Chairman’s role to ensure that these continue to support the successful transformation of the business.

“Having led the Partnership through the pandemic and the worst of the cost-of-living crisis, it is important that there is now a smooth and orderly succession process and handover,” White said. 

“The Chairman is responsible for the long-term health of the Partnership’s model – commercial success twinned with a commitment to first rate customer service and action in our communities.

“The Partnership is making progress in its modernisation and transformation with improving results. There is a long road ahead and I am committed to handing on the strongest possible Partnership to my successor,” she added.

WHAT IS THE PARTNERSHIP BUSINESS MODEL?

Started as a radical experiment over a century ago, the John Lewis Partnership is now the largest employee-owned business in the UK, with around 74,000 employees who are all Partners in the business. 

It operates JohnLewis.com, Waitrose.com, 34 John Lewis shops and 329 Waitrose shops, including a growing number offering a selection of John Lewis products. 

Waitrose has partnerships with Dobbies Garden Centres, Shell, Uber Eats and Deliveroo as well as supply agreements with Margiotta stores in Scotland and Alliance shops in Jersey. 

Outside of retail,  John Lewis Financial Services continues to grow providing insurance, the Partnership credit card, foreign currency and investments, and is currently proposing to deliver 1,000 new rental homes across three local communities.

IMAGE CREDIT: John Lewis Partnership

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