John Lewis to close some department stores as Oxford Street prepares to reopen

By

Sandra Halliday

Published
Jul 1, 2020

On what should have been a ‘normal’ day in the UK retail sector, John Lewis became latest company to announce negative news with the prospect of store closures and job cuts ahead.

On Wednesday, ahead of the John Lewis news, it had already emerged that Harrods, Arcadia and TM Lewin would be cutting jobs as well, underlining the tough times that UK retail faces after three months of closures. 

John Lewis’s Chair, Sharon White, said that the company would most likely close -- or at least not reopen -- some department stores, although it’s not yet known which branches will be axed.

In a letter to staff that was seen by The Evening Standard, White said: “As difficult as it is, it is highly unlikely we will reopen all our John Lewis stores. However, no decision has been made and any details would be shared with Partners first by the middle of July.

“The difficult reality is that we have too much store space for the way people want to shop now. We are in active discussions with landlords about ending some leases and renegotiating others to make the terms more flexible.”

The company is also planning to to close offices. It has two spaces in London’s Victoria and the smaller one, where 450 staff usually work, is to shut. 

“We are rethinking our head office space to cement more flexible working that has become a feature of the crisis,” White added. “[We] will be relinquishing Partnership House in London.” The office next door that houses 2,400 staff will stay open.

The changes come as online is expected to become an even more important channel for the company overall. John Lewis has been one of the retailers to see its online sales heading towards half of its total in recent years. Before the coronavirus crisis, the percentage of sales accounted for by its webstore was already around 40%, much higher than many of its peers. 

Given the enforced closure of its department stores in recent months, the e-sales figure for this year could be as high as 70%. But it's interesting that White also thinks online could account for between 60% and 70% of total sales next year as well.

The company also offocially announced further department store reopenings on top of the 22 that have already happened with its London flagship to start its comeback from July 16.

On July 13, John Lewis shops in Basingstoke, Cardiff, Chelmsford, Chester, Edinburgh, Exeter, Glasgow, Stratford and the Trafford Centre will reopen. But the Oxford Street flagship will follow three days later “given the size and scale of the shop, to allow additional time to finalise reopening.”

There are plans for further shops to reopen later in the summer, although these haven’t been specified and we have to assume that the branches the firm will close are among those that haven’t yet reopened.