John Lewis Partnership

Sectors: Department stores, and food, drug and mass retailers Country of operation: The UK Key product categories: Apparel and footwear, beauty and personal care, electronics and appliances, food and beverages, and home furnishings and accessories Company owners: Employee-owned Annual Metrics [caption id="attachment_138914" align="aligncenter" width="700"] Fiscal year ends on last Saturday of January of the same calendar year
*Trailing twelve months ended July 31, 2021[/caption]   Summary John Lewis Partnership is a UK-based retailer that owns and operates department stores under the John Lewis banner and supermarkets and convenience stores under the Waitrose banner. Its department stores provide apparel and footwear, beauty and personal care products, cooking and dining ware, electronics and appliances, garden equipment, and home furnishings and accessories. Some department stores contain an attached Waitrose, offering food and beverages. The department store business is divided into three product groupings: Electricals and Home Technology, Fashion (which includes beauty), and Home. The company has indicated that each accounts for roughly one-third of its total department store sales. The company also sells through various e-commerce websites, including JohnLewis.com and Waitrose.com, as well as specialist online shops, including WaitroseGarden.com and WaitroseFlorist.com for plants and flowers, and WaitroseCellar.com for wine. John Lewis operates 34 stores across the UK, while Waitrose operates 331 stores in England, Scotland, Wales and the Channel Islands. Company Analysis Coresight Research insight: The elimination of separate leaderships for John Lewis and Waitrose under former Chairman Charlie Mayfield has long looked like a mistake: Department stores and supermarkets are very different businesses—one is discretionary and cyclical, the other nondiscretionary and noncyclical. Therefore Chairman Sharon White’s appointment as the Executive Director for John Lewis in February 2020 and James Bailey’s appointment as Waitrose’s Executive Director in April 2020 is a positive development. Fiscal year 2021 (ended January 30, 2021) was difficult for John Lewis as the company recorded a loss before tax of £517 million ($707 million)—significantly weaker than its fiscal 2020 results, which saw a profit before tax of £146 million ($199 million). During its fiscal year 2021, the company has taken bold steps to return the business to a path of profit, including closing eight John Lewis stores and seven Waitrose stores that were loss-making, and is in the process of reducing its cost of its head office by over 20%. The company also expects much of its pandemic-induced online shift to remain permanently and plans to ramp up digital infrastructure across both brands, at a significantly higher level than recent years.

Tailwinds	Headwinds
Opportunities for expansion outside of the UK Opportunities to support margins and grow sales by further growing private labels Planned investments in online operations The strength of its reputation for quality and service across both banners	Heightened competition from online retailers, including in fashion, and price-focused retailers Balancing its price promise, high service levels and profitability in a retail landscape with a number of distressed rivals.

  Strategy In October 2020, John Lewis unveiled a five-year Partnership Plan to reverse its cycle of profit decline and return to a growth environment. The plan has two phases and runs from the beginning of this financial year (February 2021) to the end of the financial year ending January 2026:

1. Years one–two (February 2021–January 2023): Recover profit and lay foundations for growth
2. Years three–five (February 2023–January 2026): Accelerate change, reshape and grow

The company plans to invest around £1 billion ($1.3 billion) to modernize its shop estate and transform online. It aims to make £300 million ($410 million) of annual cost savings by 2022 and reach £200 million ($273 million) profit by the end of year two and £400 million by the end of year five. The plan’s key elements include the following five focus areas: 1. Emphasize affordable quality:

• Continue to emphasize affordable quality in Waitrose and introduce lower price points in John Lewis, aiming to broaden appeal to shoppers and acknowledging consumers are price conscious due to the pandemic.

2. Expand digital services:

• Expand digital services and invest more in virtual services like home design, personal styling and the John Lewis Virtual Christmas shop—a virtual tour of its flagship store in Oxford Street, London.

3. Introduce new services:

• Grow in areas important to its customers, including insurance, private rented and social housing, recycling and savings.

4. Focus on sustainability:

• Achieve net zero carbon by 2035 and commit to sourcing from only net zero farms in the UK by 2035.
• Halve food waste in its own operations and in its supply chain by 2030 and aim to help halve customers food waste by the same date.

5. Introduce new ethical guidelines:

• Pledge to recruit young people coming out of the care system.
• Pay partners the voluntary Real Living Wage when the company expects to reach over £200 million ($273 million) profit and aim to pay a bonus when profits exceed £150 million ($205 million) and its debt ratio falls below four times.

Revenue Breakdown (FY21) Company Developments

Date	Development
September 15, 2021	John Lewis announces that it will hire for 7,000 temporary roles across the UK for the festive season.
June 23, 2021	John Lewis announces the expansion of its furniture rental service, to offer over 200 product lines, following last year’s successful pilot conducted in partnership with rental-as-a-service provider Fat Llama.
April 27, 2021	Waitrose announces the expansion of its partnership with delivery provider Deliveroo, adding the Deliveroo service to 110 new shops by the end of summer. This will increase the number of Waitrose shops on Deliveroo to 150 in total.
April 1, 2021	John Lewis announces the launch of new brand Anyday that will offer over 2,400 products, spanning baby care and baby clothing, homeware, and technology.
February 9, 2021	John Lewis plans to stock 50 fashion and beauty brands, mostly emerging online startups, to introduce new apparel collections to customers.
December 17, 2020	John Lewis announces the appointment of Rita Clifton CBE as Deputy Chairman.
May 27, 2020	John Lewis announces the phased reopening of its shops from June 15, starting with its Poole and Kingston department stores, followed by 11 other stores on June 18.
May 5, 2020	Waitrose opens a customer fulfillment center in Enfield, North London, and plans to double its online grocery deliveries in London by September.
April 29, 2020	John Lewis appoints James Bailey, formerly a Buying Director at Sainsbury’s, as Waitrose’s new Executive Director. The company states that it is looking to appoint a corresponding Executive Director for the John Lewis chain.
April 17, 2020	Waitrose announces that it will be trebling the number of rapid deliveries every week and increasing the click and collect slots by 50%.
April 14, 2020	John Lewis launches a range of virtual services to meet the needs of Brits in isolation, including virtual home design and personal styling services and a virtual nursery.
March 21, 2020	John Lewis temporarily closes its 50 department stores while announcing that JohnLewis.com will continue to operate as normal, alongside Waitrose shops and Waitrose.com
February 4, 2020	Dame Sharon White joins as the new Chairman of the John Lewis Partnership, succeeding Sir Charlie Mayfield.
January 9, 2020	The Partnership announces the departure of Paula Nickolds, who had been Managing Director of John Lewis Department Stores since 2017. Nickolds had been due to take up a new role as Head of Brand for John Lewis and Waitrose following the planned elimination of separate Managing Director roles for the chains.

  Management Team

• Sharon White—Chairman
• Nina Bhatia—Executive Director, Strategy and Commercial Development
• Berangere Michel—Executive Director, Finance

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Source: Company reports