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John Lewis - Never Knowingly Having Retail Experience.


Battenberg

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15 minutes ago, Bear Hug said:

It's quite funny, as her looks don't match expected voice and accent. I am not saying it in any negative way, and it's not a comment on the content, just found it amusing. 

Here's a promo piccy form a while back

Sharon-White-Photo.jpg

 

I cant remember a previous JL chairman giving or being asked for a BBC interview.

 

Edited by spygirl
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Bedrag Justesen
4 minutes ago, spygirl said:

I ant remember a previous JL chairman giving or being asked for a BBC interview.

Andy Street was on BBC Working Lunch more often than the presenter.

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I dont out that I have issue with her colour.

I do have an issue with her background - civil service.

The civil service are fucking useless.

Theres this upper echelon who just shuffle from one role to another, not doing anything, dodging responsibility and accountability. 

See

As a source of skills civil service fucking useless.

As a source of high functioning, transitional software talent is beyond a joke.

These are people who tried to use Excel as a database.

Comments on her move from Ofcom to JL

https://forums.theregister.com/forum/all/2019/06/06/ofcom_ceo_quits_for_john_lewis_partnership/

8 minutes ago, Bedrag Justesen said:

Andy Street was on BBC Working Lunch more often than the presenter.

He was a JL shop manager.

He was also getting his face out for political reasons.

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11 hours ago, stop_the_craziness said:

Social Housing you say?  Like that lovely Mr Cadbury did?  I'm sure those London planning applications will look just like this:

bournville-ad.jpg

image.png.de0b4445064e3804bf06a39b00969a09.png

And not a drop of social or genuinely affordable housing in any of them.

No stats available for the number of additional properties across council tax bands within the city centre.

You can't keep adding people to a city. It makes it more shit.

 

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sleepwello'nights
45 minutes ago, planit said:

I know I am late to this and I want to give them the benefit of doubt but

They have 2 of the most valuable brands in the UK in John Lewis and Waitrose. I would argue that John Lewis especially have one of the most loyal customer bases. They have a tried and tested quality business model that has worked for decades and the main reason I would buy from John Lewis rather than Amazon is the certainty of a quality product and great customer service.

 

So their business plan is to go down market (very dangerous for a brand as it is easy to go down and difficult to go back up)

They also believe that the grass is greener on the other side, they can't make money in the market they know inside out and have huge equity in so they have decided they can make money in other competitive markets. In those new markets they have no disruptive technology (and are generally behind with technology from what I can see).

 

 

People will still buy stuff. Clothing, home furnishings, gifts, electrical. Some will prioritise quality over price, most in this throwaway age will put price first. When you can buy the same quality item at a lower price then most will. Lets face it online purchasing is generally more convenient than the High Street. It is only if urgency prevents waiting a day or two that immediate availability over-rides the convenience and price advantage of online.

Retail has to change its strategy to adopt to the challenge. Retailers fixed costs for premises is their major problem. Productivity gains from online operation again give a favourable advantage as opposed to high staff costs in retail premises. With a store staff have to be present whenever the premises are open even if they are not dealing with customers. 

A lot was made of shopping being a leisure activity and yet High Street footfall continues to fall, exacerbated by the convenience of out of town shopping and parking and accessability issues in town centres.

Retailers can only survive by reducing the square footage they occupy. This also works against them because most large retail operators are also property businesses. So their stores are losing profitability from lower sales, high fixed overheads, and reduced demand for property. 

Its a structural change that can only change if a way is found to increase footfall to the High Street. If anything the working from home trend is also working against them.

 

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Tesco needs evolution not revolution

https://ftalphaville.ft.com/2020/10/14/1602665774000/Tesco-needs-evolution-not-revolution/

For Tesco, the reverse is true. Its online business has long been viewed with suspicion by investors due to its lower margins and higher capital intensity. So any shift to consumers ordering from home is de facto a threat to its bottom line and its dividend, a key attraction for investors in a year when so many of the UK’s blue-chip stocks have culled their cash payouts.

Whether this is true or not is another matter. Online’s shares of sales rose to 16 per cent in the first half of the year from 9 per cent in 2019, but a reduction in low-margin fuel sales offset increased Covid-19 costs, meaning its operating margins remained almost flat. Any effects from its online business — positive or negative — got lost in the fog.

Worth registering to read.

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On 16/10/2020 at 09:30, Bornagain said:

You don't need 7 months to perform a strategic review to conclude that you are too expensive and need a much bigger online presence.

And who on earth thinks that they should get into renting out social housing - this is about as far from its core business as it's possible to get.

The employees should be very worried as their firm is going to go bust in the foreseeable future.

 

Absolutely astonishing isn't it

 

On 17/10/2020 at 09:51, planit said:

I know I am late to this and I want to give them the benefit of doubt but

They have 2 of the most valuable brands in the UK in John Lewis and Waitrose. I would argue that John Lewis especially have one of the most loyal customer bases. They have a tried and tested quality business model that has worked for decades and the main reason I would buy from John Lewis rather than Amazon is the certainty of a quality product and great customer service.

 

So their business plan is to go down market (very dangerous for a brand as it is easy to go down and difficult to go back up)

They also believe that the grass is greener on the other side, they can't make money in the market they know inside out and have huge equity in so they have decided they can make money in other competitive markets. In those new markets they have no disruptive technology (and are generally behind with technology from what I can see).

 

If they hit their targets I will really respect them but I feel the problems with this plan are going to be visible within 18 months and within 2.5 years there are going to be obvious large losses magnified by their neglect of their core market which is where all their profit comes from.

At this point it will be very difficult to turn round without serious capital injection and the 'partnership' will be no more.

Shame, I can't see them pulling this off, at the least it is very risky. I wonder how many dissenting voices there are internally to this plan.

 

Great analysis and post

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  • 2 weeks later...

Sorry, not done any proper research on this but after reading an article a week or so ago I noticed:

 

They implied the housing idea was to make use of land they already owned, so they are just building on their own existing land (as a 'joint venture' so they don't need any expertise) and profit off the sales or rental.

 

This would be a very different plan than just trying to get into a sector they have no experience of. Also it would be a one off gain like when the train lines build on land next to the lines.

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On 17/10/2020 at 09:51, planit said:

I know I am late to this and I want to give them the benefit of doubt but

They have 2 of the most valuable brands in the UK in John Lewis and Waitrose. I would argue that John Lewis especially have one of the most loyal customer bases. They have a tried and tested quality business model that has worked for decades and the main reason I would buy from John Lewis rather than Amazon is the certainty of a quality product and great customer service.

 

So their business plan is to go down market (very dangerous for a brand as it is easy to go down and difficult to go back up)

They also believe that the grass is greener on the other side, they can't make money in the market they know inside out and have huge equity in so they have decided they can make money in other competitive markets. In those new markets they have no disruptive technology (and are generally behind with technology from what I can see).

 

If they hit their targets I will really respect them but I feel the problems with this plan are going to be visible within 18 months and within 2.5 years there are going to be obvious large losses magnified by their neglect of their core market which is where all their profit comes from.

At this point it will be very difficult to turn round without serious capital injection and the 'partnership' will be no more.

Shame, I can't see them pulling this off, at the least it is very risky. I wonder how many dissenting voices there are internally to this plan.

The writing was on the wall as soon as online shopping became prevailent.  Go to John Lewis, ask a bunch of questions from their "experts" then buy it £100 cheaper online.   Not to mention you can get much better expert reviews from online sites wherever you are now.   Now only the gullible shop there for big ticket items.  Selling you Grannie an i7 gaming laptop to check the odd email from the grandkids....

4 years ago now they outsourced their online customer service (including warranties) to Crapita.   That broke it.   Much better service from.... anyone else.  

Why anyone would ever enter a store now is beyond me.

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1 minute ago, Burned Out said:

The writing was on the wall as soon as online shopping became prevailent.  Go to John Lewis, ask a bunch of questions from their "experts" then buy it £100 cheaper online. 

 

I have first hand experience of this, there was no way to charge for the valuable part of the transaction. Salespeople would spend 3 hours giving people information* that needed extremely experienced staff and expensive showroom space and have nothing to show at the end of it. The customers took that information as a freebie and started negotiating price against transaction-only internet retailers. 

There was no real way to solve the problem (like charge to enter the showroom or per hour) so the only way out was to evolve**.

 

* sector was white goods

** Internet trading was also not the answer as there are companies falling over themselves to sell at a loss and I don't see that changing any time soon.

 

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The Generation Game
40 minutes ago, planit said:

Sorry, not done any proper research on this but after reading an article a week or so ago I noticed:

 

They implied the housing idea was to make use of land they already owned, so they are just building on their own existing land (as a 'joint venture' so they don't need any expertise) and profit off the sales or rental.

 

This would be a very different plan than just trying to get into a sector they have no experience of. Also it would be a one off gain like when the train lines build on land next to the lines.

Or selling a business to China. 

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51 minutes ago, planit said:

Sorry, not done any proper research on this but after reading an article a week or so ago I noticed:

They implied the housing idea was to make use of land they already owned, so they are just building on their own existing land (as a 'joint venture' so they don't need any expertise) and profit off the sales or rental.

This would be a very different plan than just trying to get into a sector they have no experience of. Also it would be a one off gain like when the train lines build on land next to the lines.

That's a very 'Joe Public' view of property, especially with our times of ever inflating house prices.

If you're a business you look at what you do.  If you have assets that are worth real money that aren't relevant to your main business you get rid of them and use the money to invest in the business you know about.   This is doubly true when the rate of return on doing anything else with that asset is really really low.  Sure, you can do a JV, but then you're either a silent party (and they'll cream the profits) or you'll get involved (almost certainly beyond your abilities, unless you invest so much cash into that other business that you might as well have sold it off in the first place).

Train lines is a good example -- in the vast majority of cases the train line companies just auctioned the land off.  This was exactly the right thing to do -- they're not (shouldn't be) land development companies.

The trouble with the UK is that we've (as a country) been brainwashed to think of land as unlike other assets.  If they had 'other assets' in the form of (eg) a bus company or a small facility manufacturing keyrings, we'd think nothing of them spinning the asset out.

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  • 3 months later...
9 minutes ago, Ash4781b said:

https://www.dailymail.co.uk/news/article-9283671/John-Lewis-set-shut-eight-42-remaining-department-stores.html
 

looking like a reported another 8 of 42 John Lewis stores to be shut. Are they still running the never knowingly undersold thing ?  Really they need someone decent in there else they going the way of Debenhams.

What do we need department stores for if we have managed a year without them?

Obviously sitting on a sofa or picking a dining chair up and seeing what it feels like is just so pre-2020.

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1 hour ago, Ash4781b said:

https://www.dailymail.co.uk/news/article-9283671/John-Lewis-set-shut-eight-42-remaining-department-stores.html
 

looking like a reported another 8 of 42 John Lewis stores to be shut. Are they still running the never knowingly undersold thing ?  Really they need someone decent in there else they going the way of Debenhams.

Was just about to post that too, just reading about it.

Expensive for what they are, boomers afraid of the coof, buy cheaper online ... bust business model

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8 hours ago, sarahbell said:

What do we need department stores for if we have managed a year without them?

Obviously sitting on a sofa or picking a dining chair up and seeing what it feels like is just so pre-2020.

Bought this T-shirt about a week ago from Uniqlo.

 

tshirt.jpg

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15 hours ago, The Masked Tulip said:

Is there a list of stores yet?

Not a full list. I think the most recent reports relate to expectations coming for the March full year accounts. Though I don’t quite understand where Sunday times who have the information got it from. But they are employee owned so maybe market disclosures are different. I could buy the Sunday times I guess.

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  • 3 weeks later...

John Lewis warns of further store closures

Heavy investment in shops that remain open will mean another year of weak profits

https://www.ft.com/content/72ea7cd3-35b8-42ac-991c-c1782de2c3d6



John Lewis warned that not all of its stores would reopen after lockdown restrictions ease on April 12 while heavy investment in those that remain will mean another year of weak profits.

“There is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,” said Dame Sharon White, chairman, adding that final decisions were expected by the end of the month.

Theres obviously a white man on the comments:

 

They are throwing £3.2bn a year into operational expense, of which 2/3 is towards their store real estate and c£1bn is admin expenses.
 
(anyone looking for revenue, its £10.1bn with COS c£6.8bn)
 
The plan to cut £300m a year of costs over 5 years just isn't fast enough. Almost their entire gross profit is absorbed by stodgy costs. 
 
The landscape is changing so fast that that glacial rate of change risks achieving insufficient results by the time 5y actually comes. 
 
They have to do better than this - JL has always held a special place with the British public (and me), but their strategy is far too weak in the current environment. 
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Mervyn Keene, 'Clubman'
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I am no expert (heaven help us) but there is a whiff of terminal decay about JL under the current leadership.
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TheMagnificentZultan
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Higher sales at Waitrose snd booming online sales for JL. Where’s the decay?
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RTM Boy
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Where’s the strategy?  Cost cutting...more cost cutting...moving more online (who isn’t?)...sourcing Waitrose  “general merchandise” from JL...more outsourcing...hoovering up business rates relief until at least June.
 
Oh, and debts of £2.1billion.
 
What could possibly go wrong?
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intelligent observer
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JL has two unrelated buisness, the food stores and the Department Stores, it is only when you separate all the numbers of the two buissneses do you get a clear understanding of their individual strength and weaknesses, Sales of 10billion COS 6 billion for both buissneses is thus meaningless until you separate those numbers for each of the two buissneses , one suspects that the food Buissnes is a conventional profitable enterprise whilst the Department Store Buissnes whilst beloved by so many but in the age of Ecommerce is having a tough time justifying the costs of its Property costs etc.
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Blofeld
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For too long JL has assumed that it would benefit from the closure of all other department stores over the last 40 years without wondering why they were closing.   It has tried to adopt the experience and display case model but found that ingrates look at the item then buy it cheaper online elsewhere.   It has also struggled with the costs of online delivery (and retrieval) and its service standards have dived.   Finally the independent nature of the Waitrose and John Lewis brands means unjoined CRM while the historic data from my 45 years as a customer has been binned.  
 
They deserve to survive but probably won’t. 
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Jamoza
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As my wife, who works for JLP, states, "Dame Sharon White writes these articles in the gazette every month and they’re always about people issues not business issues.". With all due respect, Dame White is not fit to turn around this retailer. She lacks the experience and was not hired based on business acumen. 
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S.Pal
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Today’s Dido Harding’s leadership at Test & Trace is similar to Sharon White’s leadership at John Lewis – neither has domain knowledge or expertise. John Lewis is a yesterday’s retailer, like M&S, with no future led by a Chair, who has no experience of modern retailing. Store closures aren’t going to be enough to save either John Lewis or Sharon White.

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DMS01
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Unfortunately, John Lewis is effectively 'yesterday's store' and will not survive modern day shopping habits of the most well off and/or tech savvy public. I agree with the majority of comments re. Sharon While, since I detect she really does not know the business at all. Even the JL employees dont appear to much faith in her. I predict she will be replaced.
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Wlkrrch
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Managed decline...
 
A small corner of a Waitrose with a pitiful handful of housewares or electrical goods can't remotely compete with the selection in a full-sized department store. It's called 'comparative shopping' for a reason. Once John Lewis is mostly online it will be just another online retailer, and it will compete on price and speed of delivery and not much else - good luck beating Amazon on those. It's also vanishingly unlikely the customer service experience at a Waitrose will remotely match what is currently on offer in the bigger stores. 
 
Plus, I wonder if Sharon White is missing the massive loss of visibility and of goodwill there will be to the John Lewis brand name if it leaves entire regions without a branch and does serious harm to individual city centres by pulling out? I for one am concerned at the knock-on effect the closure of the Newcastle store would have on the city centre, even though Fenwick next door is in almost every respect a vastly superior department store. And in Nottingham and Sheffield the JLP department stores pretty much anchor the city centre. 
 
And nobody is going to drive the 90 miles to Leeds or 110 miles to Edinburgh to measure up for curtains. 
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F2020
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<“There is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store,”>
 
Is an ex-civil servant the right person to turn around a struggling retailer?
For how long will the "partners" tolerate the underperformance?
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Largo2013
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Yes. JL need a respected retail expert.  Like Philip Green.  Or Mike Ashley.  Someone the staff and customers would trust and respect...
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F2020
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Mr Ashley, while I disagree with many of his tactics, is an excellent retailer.   Ultimately, he delivers value and people transact with his business.  People also transact with Amazon - it delivers value despite...
 
The thing about civil servants is that they understand customers like HMRC "understands" tax payers as "customers".  Except when in the private sector, they can't force customers to pay up.  Different skills set totally.
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Largo2013
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‘The thing about civil servants...’. A rather sweeping assertion about a group of people with diverse experience, talent and skills, no?  ‘The thing about people who buy stuff from Sports Direct...’. See how this stuff works? 
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shug4476
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Commercial landlords cooking yet another goose.
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Miguel29
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Wait for the dilapidations bill...!
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SD10
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The article would have been rather more complete if it had mentioned that John Lewis took £190m of government assistance (business rates and furlough).  JL itself points out (in narrative only) that it would have made a loss without this.  However, they do the usual game of presenting headline “underlying” figures that journalists in a hurry to meet deadlines can easily grasp.
 
Sharon White is the wrong person to lead this business.  She is a diversity appointment.  Ex civil servant with no retail experience having to deal with a distressed company in one of the fastest moving business sectors.  JL needs a turnaround specialist.  It may not have long.
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PassiveActive
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Charlie Mayhew wanted to make a statement with hiring Sharon - I wonder if that was for his ego rather than the business need? 

 

 

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John Lewis is an "aspirational" retailer for those who want quality and bragging rights. Those people are dying off and the younger generations don't care. 

Purveyor of middle and upper class goods to well off middle and upper class customers. Unfortunately the well off middle classes have all but disappeared.

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