John Lewis has a lot of new money making ideas these days, from renting apartments to selling home insurance and even landscaping gardens, but what about the old method, by managing its department stores well?
In a very critical note released this month, influential retail analyst Steve Dresser suggested Britain’s favorite department store chain was on a ‘platform on fire’ after finding the ‘one of his shops in dismal condition, trying to move a bric-a-brac of old Christmas and Easter Stock, including £ 60 candles in torn boxes and a covered £ 95 essential oil diffuser filthy fingerprints.
“Even though you can blame the lockdown, how can you justify trying to charge £ 16.50 for a chocolate Advent calendar in June? Asked Dresser who said management needs to “get out of the bubble and into the stores”.
John Lewis is losing his way, Dresser said, pointing to the ‘abject retail standards’ discovered during a visit to his relatively new store in Leeds. Although it is “only one store, it is one store too many,” he said. They should “stick to knitting” because “everything else takes attention away from the core business and it takes more time and expertise, not less”.
The employee-owned group, which also owns Waitrose, suffered its first-ever annual loss in 2020. Big business changes caused by the pandemic have prompted it to close 16 of its 50 stores and pledge to spend $ 800 million of pounds sterling to renovate the remaining branches, as well as to improve its website and shopping app. The crisis has meant staff failed to get a bonus for the first time in 67 years, a bonus also unlikely this year.
Pippa Wicks, the former management consultant who took over John Lewis last summer, pushes back criticism and says John Lewis is getting his “mojo” back. It has visited 18 of its 34 stores in the past six weeks and said any problems likely stemmed from a quick turnaround when the lockdown ends.
“These stores closed on December 22 and reopened on April 12 and everyone had two and a half weeks to prepare,” she explained. “In the stores that I visited, the partners did an absolutely extraordinary job.
Dresser has also highlighted inventory issues on its website, especially in areas like patio furniture right now. However, Wicks said all retailers were grappling with Covid stock shortages. “The availability issues that we see concern the entire industry. I’m really, really proud of what our partner stores have done to be as fit as they really are.
When John Lewis stores reopened in the spring, shoppers were greeted with a new, low-cost brand, Anyday. The label, which covers 2,400 products from a £ 1 wooden spoon to a £ 530 wardrobe, is replacing its cheaper own-label products with prices slashed by 20% on average. A thousand more products are to be added, including basic clothing, to the Anyday line that will be sold at Waitrose.
But Dresser wasn’t impressed with Anyday either, describing the brand as “confusing” with prices still looking high. A pack of nine tea lights costs £ 4, a sum that would buy three times as much at Ikea while the cheapest bed costs £ 70 compared to £ 40 at the rival store.
“What problem does the brand solve? Dresser asked. “Do people go to John Lewis to save money?” No, they seek experience and are cared for with quality products, with attentive partners and stores moderately well presented and offering an element of idealism.
In John Lewis’ glittering flagship on Oxford Street in central London, Anyday is hard to miss due to the giant orange panels plastered on the walls. The stenciled logo aims to reinforce its valuable credentials and, for good measure, the tagline promises “quality you would expect at prices you wouldn’t”.
John Lewis wonders how to replace his “never knowingly undersold” price promise. Retail analysts argue that the guarantee, which does not extend to online retailers only, has become moot as 60% of John Lewis’s own business will soon be on the web. In this context, the Anyday range is meant to return to one of the company’s original tenets of ‘providing value for money’ and since its launch two months ago, John Lewis has achieved a number business worth £ 20million.
After a miserable year, Wicks said Anyday, with its bright orange color scheme, is bold and modern and has proven itself to customers. It would use the same approach to revamp its mid-price and high-end product lines. “I’m not the type to have dust under my feet when we try to move companies forward. “
Passing his eye over the colorful displays of Anyday home furnishings in the Oxford Street store, GlobalData analyst Patrick O’Brien said it was difficult to launch a value brand in so many different product areas.
But with John Lewis under attack from cheap, online brands ranging from Dunelm and Ikea to B&M, he “had to do something,” he says. “Austerity opened the door to retailing in the UK and these brands have since become mainstream, attracting middle class shoppers, leaving John Lewis vulnerable. “
O’Brien thought the store was in good shape, but with a £ 595 crystal chandelier glistening from the store ceiling near a £ 30 budget lamp, it had to be. “You play on a different level here. If you want to get people to spend that kind of money, you have to maintain a store to a high standard.
“There’s no feeling of excitement but it’s competent and safe, and for a certain buyer that’s what he expects from John Lewis. “
John Lewis has stopped posting his weekly sales figures, so followers of the company will have to wait until fall for an update. Wicks seems certain that, unlike Debenhams, John Lewis is not a doomed franchise. “I look positive because the trading is good,” she said. “We’re back and we’re going to be happy and daring. “