// John Lewis Partnership chair Sharon White updates staff on strategic review, which was first announced in March
// The letter outlined five strategic steps, featuring a reduction in HQ costs & “rebalancing” of store estate
// Other features include the possibility of branching out to private housing/renting
John Lewis Partnership is exploring the possibility of branching out to private rented housing as part of five strategic steps to grow the business in a post-coronavirus market.
In a letter sent to 80,000 John Lewis and Watrose staff this morning, chair Sharon White outlined the next steps in the business strategic review that aim to help the partnership flourish after the coronavirus pandemic brought about new challenges.
The plans are grouped under five areas of strategic focus: “driven by purpose”, “simplifying how we work”, “strengthening retail”, “expanding into more services”, and “partnering to grow”.
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The letter – which came about after White requested ideas from employees on how to help the business thrive – is an update on the business review the partnership announced in March, shortly after White replaced Sir Charlie Mayfield as chair.
Essentially, White said the next steps would see a “rebalance” of the partnership’s store estate, a reduction of head office costs, a focus on home and nursery, a “digital-first” approach in department stores, providing John Lewis Home products within Waitrose stores, and working with third parties on private and affordable rental housing.
Of the “expanding into more services” step, White selected four areas for further development: financial service, horticulture, private rented housing and rental/resale/recycle.
While the partnership already offered financial services and horticulture and would now be looking to expand on them, the latter could potentially transform the company’s role in retail and the wider economy.
“As we repurpose and potentially reduce our shop estate, we want to put excess space to good social use. We are exploring with third parties the concept of new mixed-use affordable housing,” White wrote in her letter.
In regards to rental/resale/recycle, she added: “This is a growing priority for our customers. Options include creating a market leading channel for rental of our products or building a marketplace to sell ‘used’ products.
Under “simplifying how we work”, White said the partnership was still targeting £100 million in savings in head office costs by “taking out duplication and cost”.
The John Lewis Partnership had previously announced that the head office teams for John Lewis and Waitrose would be integrated into one rather than operate as wholly separate teams, and White confirmed that the number of senior managers have been reduced by one third.
Regarding “strengthening of retail”, White said this would entail investing in its digital and ecommerce capabilities, especially online customer experience and personalisation, an updating of current stores to meet customer expectations, a focus on home and nursery, and making John Lewis Home products available in Waitrose stores and more Waitrose food available in John Lewis stores.
“We have two of the best loved and trusted brands in the UK, rated highly for our personal service and expert, impartial advice,” White wrote.
“Customers are, however, shopping in very different ways – younger people especially – with the pandemic accelerating the importance of digital. We expect John Lewis to be a 60 per cent online retailer, from 40 per cent pre-Covid-19; and Waitrose to rise above 20 per cent, from five per cent.”
She added: “Shops will always be crucial to the brand but they will be in support of online.
“Over the next five years we expect to rebalance our shop estate so that we have the right space in the right locations where people want to shop.”
Meanwhile, White said the John Lewis Partnership was already “in a number of commercial discussions” with other businesses that can offer mutual benefits through new partnership deals.
White added that she and the partnership executive team would spend time with staff by visiting every site over the course of the year to discuss the strategy, starting this autumn.