John Lewis Partnership

The John Lewis Partnership plc[1] (JLP) is a British company which operates John Lewis & Partners department stores, Waitrose & Partners supermarkets, its banking and financial services, and other retail-related activities. The company is owned by a trust[2] on behalf of all its employees — known as Partners – and a bonus, akin to a share of the profit was paid to employees until 2020. JLP group is the third-largest UK non-traded company by sales in the Sunday Times Top Track 100 for 2016.[6] The chain's image is upmarket, and it appeals strongly to middle- and upper-class shoppers.

Not to be confused with Lewis's.

John Lewis Partnership plc
TypePublic limited company[1][2]
IndustryRetail
FoundedOxford Street, London (1929 (1929))[3]
FounderJohn Spedan Lewis
HeadquartersWestminster, London, England, UK
Key people
Dame Sharon White
(Chairman)
ProductsClothing, watches & jewellery, giftwares, cosmetics, housewares, furniture, beds & bedding, audio-visual, computing, photography, food, direct services, financial services
Revenue £10.15 billion (2020)[4]
£146 million (2020)[5]
Number of employees
 83,000[4]
Subsidiaries
Websitejohnlewispartnership.co.uk

In the 12-month period to 25 January 2020, the Partnership generated revenues of £10,151m, profit of £146m with net debt at £2,451m (2019, £2,682m). The Partnership also had a pension funding deficit of £378m as at 25 January 2020, with a plan to eliminate the deficit by 2026.

The Partnership also supplied the Ocado web supermarket with Waitrose own-brand foods and John Lewis own-brand non-food items. However, this partnership expired in September 2020, when Marks & Spencer began a new £750 million contract with Ocado.

History

1860s origins

John Lewis opened a drapery shop at 132 Oxford Street, London in 1864. Born in Shepton Mallet in Somerset in 1836, he had been apprenticed at 14 to a linen draper in Wells. He came to London in 1856 and worked as a salesman for Peter Robinson, an Oxford Street draper, rising to be his silk buyer. In 1864, he turned down Robinson's offer of a partnership, and rented his own premises on the north side of Oxford Street, on part of the site now occupied by the department store which bears his name. There he sold silk and woollen cloth and haberdashery. His retailing philosophy was to buy good quality merchandise and sell it at a modest 'mark up'. Although he carried a wide range of merchandise, he was less concerned about displaying it and never advertised. His skill lay in sourcing the goods he sold, and most mornings he would go to the City of London, accompanied by a man with a hand barrow. Later he would make trips to Paris to buy silks.[7]

Lewis spurned holidays and games and devoted himself entirely to the business, which was successful. He invested the money he made from it in residential and small retail properties, many of which he never visited. He expanded the Oxford Street business by renting neighbouring properties on Oxford Street and then along Holles Street, and gradually moved into other classes of merchandise: first the new area of ready-made women's apparel, and later children's wear and furniture. He never held 'sales', saying that he was intent on building a sound, permanent business.[8]

In 1884, aged 48, Lewis married Eliza Baker, a schoolmistress with a university education, who was 18 years his junior. They set up home in a mansion on the edge of Hampstead Heath, for which Lewis made up the name Spedan Tower after his aunt, Ann Speed,[9] and when Eliza bore a son in 1885, he was called John Spedan Lewis. A second son, Oswald Lewis, was born in 1887. After Westminster School, both sons joined Lewis in the business, and he gave each of them a quarter share of it on their twenty-first birthdays.[7]

1900s family disagreements

There was constant quarrelling between Lewis and his sons. By 1909, Oswald wanted out, and Lewis senior reluctantly agreed to buy back Oswald's quarter share of the business for £50,000 (equivalent to about £4.5 million in 2010). Oswald went to read Law at Oxford, qualified as a barrister, and became a cavalry officer in 1914, but was injured and discharged in 1916, whereupon he accepted an invitation from his father to rejoin the business.[8]

Lewis had several run-ins with Lord Howard de Walden, his Oxford Street landlord, and in 1903 he spent three weeks in Brixton Prison for defying a court order obtained by de Walden. In 1911, de Walden sued him for libel; Lewis was found guilty, but the jury awarded damages of just a farthing.

In 1906, Lewis bought a controlling interest in the Sloane Square-based business Peter Jones Limited, the eponymous founder of which had died the previous year. Lewis walked from Oxford Street with the £20,000 purchase price in banknotes.[7]

1910s

In the next 13 years, the Peter Jones business was not profitable – no dividends were paid to Lewis and the external shareholders  – and in desperation, in 1914 Lewis appointed his son Spedan as chairman of Peter Jones. This gave Spedan Lewis complete control, and he decided that the underlying problem was that the staff had no incentive to do a good day's work because their own interests were not in line with those of the business. He shortened their working day and instituted a system of commission for each department, paying selling staff amounts based on turnover. He held regular meetings at which staff could air any grievances directly with him. In 1916, after a disagreement with his father, Spedan Lewis exchanged his 25 per cent interest in the Oxford Street business for Lewis's shares in Peter Jones Limited. He made improvements in staff conditions, including granting a third weeks paid holiday each year. He had hot and cold running water installed in the staff bedrooms over the shop. In 1918, he started publishing a fortnightly newspaper telling staff how the business was faring. In 1919, he instituted a staff council meeting, the first decision of which was that staff should be paid weekly instead of four-weekly. The business prospered: there was a profit of £20,000 in 1920.[8] Spedan Lewis's radical idea was that the profits generated by the business should not be paid solely to shareholders as a reward for their capital. Shareholders should receive a reasonable but limited return, and labour should be the recipient of the excess. His concept of 'fairer shares' involved sharing gain, knowledge, and power. In 1920, Spedan started distributing Peter Jones preference shares to staff, who were referred to as Partners.

In contrast, John Lewis made no improvements to the conditions of his staff, and grievances built up to such an extent that in 1920, there was a five-week strike at Oxford Street. Despite support for the strikers from – among others - Queen Mary, Lewis sacked them and engaged new staff.

1920s

The early 1920s were not successful for Peter Jones. Dividends on preference shares, many of which were held by employees, were not paid. In 1924, there was a reconciliation between John Lewis and Spedan Lewis. Trade at Oxford Street had fared better, and John Lewis made a cash injection into the Sloane Square business.[8]

In 1925, Spedan Lewis devised the slogan 'never knowingly undersold' at Peter Jones. Intended mainly as a control on sourcing merchandise, it also meant that customers could shop knowing that they were not paying more at Peter Jones than they could buy identical goods for at other stores. Trade improved and profit-sharing was resumed.

By 1926, Lewis senior was 90, Spedan was impatient to gain control of John Lewis, Oxford Street so that he could implement his radical ideas there, and Oswald again wanted out. Without telling their father, Spedan took out a bank loan and bought out Oswald's inheritance. After going around the world, Oswald embarked on a political career, becoming Conservative Party MP for Colchester in 1929, and holding the seat until 1945. John Lewis died aged 92 in 1928,[10] and Spedan Lewis became the sole owner of the Oxford Street business, in addition to Peter Jones. That same year, he bought the premises of T J Harries on the eastern side of Holles Street in Oxford Street, into which he expanded John Lewis.

In 1929, Spedan Lewis signed a deed of settlement, which transferred shares in John Lewis & Co. Limited and Peter Jones Limited to trustees (himself, his wife, and his brother-in-law). The profits of the combined business would be distributed to its employees, either as cash or as fixed-interest stock in the new company: John Lewis Partnership Limited. In return, Spedan Lewis took £1 million of non-interest-paying loan stock, which would be repaid to him over thirty years. He would retain personal control of the business, but would not receive any interest, fees or salary, living on the repayment of the loan stock. These annual capital repayments were initially equivalent to about £1.5 million in 2010 money, but inflation reduced their value by the 1950s to the equivalent of about £0.5 million in 2010 money.

1930s expansion

In 1933, JLP started acquiring other retail businesses, buying Jessop & Son of Nottingham, and Lance & Lance of Weston-super-Mare. In 1934, it acquired Knight & Lee in Southsea, and Tyrrell & Green in Southampton. It also started rebuilding Peter Jones to modern design. In 1937, it bought Waitrose Limited, which operated ten counter-service grocery shops in London and the home counties.[11]

1940s and World War II

The biggest acquisition came in 1940 when JLP paid £30,000 for Selfridge Provincial Stores Limited, which owned 16 shops: John Barnes in Hampstead, Blinkhorn & Son in Gloucester and Stroud, Bon Marché in Brixton, Buckleys in Harrogate, A H Bull in Reading, Caleys in Windsor, Cole Brothers in Sheffield, Holdrons in Peckham, Jones Brothers in Holloway, George Henry Lee in Liverpool, Pratts in Streatham, Quin & Axten in Brixton, Robert Sayle in Cambridge, Thomsons in Peterborough and Trewin Brothers in Watford, substantially increasing the size of the business.

The Second World War took its toll, and several stores were damaged by bombing, notably the 'west house' of John Lewis, Oxford Street (on the west side of Holles Street), which was lost completely in September 1940. Some small businesses were acquired, including the John Pound leather goods shops, and two further department stores in Eastbourne and Tunbridge Wells.

In 1948, three drapery stores were created in South Africa, but these were closed in 1954.

1950s

In 1950, Spedan Lewis executed a second deed of settlement, which passed ownership of JLP to trustees to hold for the benefit of those who worked in the business. He continued to manage it as if he were still the owner, saying in 1957 that it was necessary to concentrate management in one pair of hands.[12]

Spedan Lewis also retained for himself the right to choose his successor when he retired on his 70th birthday in 1955. He had originally intended that Michael Watkins, his right-hand man for many years, would succeed him as chairman, but Watkins died in 1950. Spedan asked his son, Edward Lewis if he would fill the role but he declined. Spedan appointed a loyal, long-serving lieutenant, Bernard Miller, but expressed the hope that in due course Edward would succeed Miller as chairman. In the event, Miller was succeeded by Peter Lewis, the son of Oswald Lewis.[8]

In 1953 JLP sold several small stores but acquired two large ones: Heelas in Reading and Bainbridge in Newcastle upon Tyne. The rebuilt store on Oxford Street was reopened in 1960, and the sculpture Winged Figure by Barbara Hepworth was added in 1962.

The principle and slogan never knowingly undersold adopted in 1925, is still honoured and has been widely copied. The principle has been refined, most notably to exclude retailers who trade only online. The pledge has recently been revised to include extended insurance and delivery charges when comparing prices.[13] John Lewis monitors local competitors, and reduces the shelf-edge price if it is being 'undersold'.

2000s

To accommodate national advertising, in 2002, the company began the process of renaming department stores not branded as John Lewis (Tyrrell & Green, Heelas, etc.) with the nationally recognisable name. Peter Jones in London remains the sole exception to this policy. The company experimented with smaller format stores, adding 12 At Home shops and 2 Convenience-driven stores, alongside 3 more full-line department stores (Leeds, Stratford, Birmingham).[14]

In 2012 and 2013, John Lewis faced a series of strikes by cleaners who had been outsourced regarding pay.[15]

Employee representation within JLP

Employees at JLP are called Partners; this is not the same as the legal term of partner and is simply an alternative title used internally by JLP.

Across supermarkets, department stores, head offices, and other business units, Partners elect representatives to share voice and shape priorities through a process known as PartnerVoice. Representatives meet to collate opinions, question management, and solve local issues. Where a topic is relevant to a wider business area, issues can be escalated to Forums, the JLP's second level of employee representation. Elected Forum representatives from across regions of Waitrose and John Lewis branches, or across areas of head office locations, meet to discuss broader issues and question their leaders and directors.

The third and highest level of the JLP's democratic structure is the Partnership Council, a directly elected body of 58 Partners who both represent opinion from across the Partnership and hold the Chairman to account for their running of the business. Partnership Councillors are company insiders with voting rights, and the only body within the company's governance structures with the power to remove the Chairman from office. Biannually the Council conducts a “Holding to Account” session where the Chairman fields questions from representatives in an open meeting, following which a vote is held which indicates whether or not Councillors support the Chairman's leadership and the progress of the business.[16]

Further to this structure, the Partnership Council elects three directors to the "Partnership Board". The three Elected Directors join the Chairman, Deputy Chairman, Executive Director Finance, and two further Non-Executive Directors to form the Partnership Board. The Council also elects three individuals to act as Trustees of the John Lewis Partnership.[17]

The JLP publishes a weekly in-house magazine, called The Gazette. It is the oldest in-house magazine currently still being published in the UK. The magazine features a letters section where any Partner across the business can anonymously seek answers from senior leaders to their questions and concerns. Each John Lewis branch once had its own weekly magazine called The Chronicle; this is no longer published.

Employees of JLP received an annual bonus until 2020, akin to a share of the profit. It is calculated as a percentage of salary, with the same percentage awarded to all employees. The bonus is dependent on the profitability of JLP each year, varying historically between 5% and 20% of Partners' annual salaries, but falling to 3% in 2019 in light of tough trading conditions.[18] The annual bonus dropped to 2% in 2020[19] and it has been confirmed that no bonus will be paid in 2021 in light of the COVID-19 pandemic.[20]

In 1999, in response to a fall in profits, there were calls from some employees for the business to undertake an initial public offering and float on the stock market. If this had gone through, each employee stood to receive a windfall averaging £100,000. A company-wide ballot was held regarding the matter which did not approve the proposals.[21]

Department stores

John Lewis & Partners
John Lewis & Partners' flagship department store in Oxford Street
Main article: John Lewis & Partners

As of 2012 the John Lewis division operates 30 full-line department stores, 1 John Lewis click and commute at London St. Pancras International, 1 John Lewis convenience store at London Heathrow and 10 John Lewis at Home Stores and a web store.[11] The stores are in a mixture of city centre and regional shopping centre locations. The flagship Oxford Street store in London remains the largest John Lewis outlet in the UK.[22]

Newer John Lewis at home stores are opening to cater for areas which have no large John Lewis department store near them. They are around a third the size of a normal department store. The first store opened in Poole in October 2009. Croydon followed in August 2010 with Tunbridge Wells and Swindon opening later that year. In Autumn 2011, Tamworth and Chester were opened, followed by Chichester, Newbury and Ipswich in 2012. This type of store contains both Home and Electrical departments with services such as a cafe and 'Click and Collect' also available. A new 'flexible format' store was trialled in Exeter 2012, with full line of stock in a smaller physical store, relying heavily on 'click and collect'/next day delivery both in-store and out.[23]

Peter Jones

Peter Jones is a large department store in central London. It is a store of JLP and located on Sloane Square, at the junction of King's Road and Sloane Street, in the Chelsea district, close to the Belgravia and Knightsbridge districts. Peter Jones was founded as an independent store but was bought by John Lewis, owner of the eponymous store in Oxford Street, in 1905. In 1929 Lewis's son, John Spedan Lewis, who then owned both businesses, combined them into a single business.

Supermarkets
Interior of a Waitrose & Partners store in Enfield
Main article: Waitrose & Partners

JLP also owns Waitrose & Partners, an upmarket supermarket chain which has 336 branches (2015) and 61,000 (2014) Partners. Waitrose trades mainly in London and the South of England and was originally formed by Wallace Waite, Arthur Rose, and David Taylor. The company was taken over by JLP in 1937. The acquisition of 19 Safeway branches in 2004 greatly increased the size of the company and saw branches open in the north of England for the first time. A further six stores were purchased from Morrisons in Autumn 2005 and again helped the march into previously unexplored territories. Then, in March 2006, Waitrose announced the purchase of five stores from Somerfield, with the first two stores in Scotland, both of which are in the capital, Edinburgh. In July 2006, Waitrose announced the purchase of six more stores and a distribution centre from Morrisons. In 2007 the first purpose-built Waitrose supermarket in the north of England opened at Cheadle Hulme, Greater Manchester. In January 2009, Waitrose announced the purchase of an additional 13 stores from Somerfield which included a store in Glasgow marking its third opening in Scotland. The chain opened its first new-build Scottish store and fourth Scottish location overall in Glasgow's Newton Mearns in the autumn of 2011. Waitrose also sells online and was the first to offer a free delivery service.

Ocado

Waitrose brand merchandise was previously sold by Ocado, an independent online supermarket, until September 2020.

JLP helped finance Ocado's creation, and later transferred its interest to its pension fund, which owned 29% of Ocado.[24] The pension fund fully divested itself of its final 10.4% share ownership in February 2011 for £152m, which represented a total profit from the company's investment in Ocado of about £220m.[25]

The pension fund sale in 2011 valued Ocado at approximately £1.4bn.

Direct services

Unusually, John Lewis department stores did not accept Visa and MasterCard credit cards until 1999, previously only accepting the John Lewis Account Card (a form of charge card) and the Switch (now Maestro) and Delta (now Visa Debit) debit cards.

In June 2004, JLP launched their own credit card, branded the "Partnership card", with HSBC.[26] The card was launched to complement the existing John Lewis and Waitrose account cards.[27] The Partnership card is designed as a cashback credit card, offering holders varying levels of rewards which are exchanged for vouchers to spend with businesses of the partnership.

The company has provided insurance products since it launched "Greenbee" in October 2006.[28][29] Initially, the company offered home, travel, wedding and events insurance as well as a travel and tickets service.[29] It subsequently expanded to offer other services including car[30] and pet insurance, insurance for second homes[31] and broadband Internet access.[32] Greenbee has since been renamed John Lewis Insurance.

The company also provides broadband and home telephone services.[33]

Manufacturing

JLP currently operates one manufacturing business, Herbert Parkinson, in Darwen, Lancashire. This company, established as a weaver of jacquard fabrics in 1934, was acquired by the Partnership in 1953. Herbert Parkinson currently produces John Lewis own-brand fabrics and curtains as well as filled furnishing products such as cushions and pillows. The company operates a wholesale business to outside customers in addition to supplying John Lewis branches.[34]

Until September 2007, the Partnership also owned two further textile production businesses: Carlisle-based printer Stead McAlpin (founded c. 1875, 200 workers) and Haslingden, Lancashire-based weaver J. H. Birtwistle.[35][36] In spite of capital investment and improvements in efficiency, neither had been profitable for almost 10 years. Apex Textiles, whose managing director is Jim Kidd, was formed to buy the businesses. The Partnership announced its intention to retain both businesses as key suppliers once they were under new ownership and to agree ex gratia payments to employees at the affected sites.

The manufacture and sale of furnishing textiles was organised by the business Cavendish Textiles,[37] produced under the trade name of 'Jonelle' from 1937, dropped in 2000 in favour of 'John Lewis'. Designers included many associated with Heal's, such as Lucienne Day, Pat Albeck,[38] Jacqueline Groag[39] and Althea McNish.

See also

References

Notes

    Citations
    1. "JOHN LEWIS PARTNERSHIP PLC". Companies House. Retrieved 17 October 2019.
    2. "Employee share ownership: John Lewis Partnership "not what it purports to be"". hrmagazine.co.uk. Retrieved 27 July 2020.
    3. "John Lewis Partnership — Our founder — the John Spedan Lewis story". John Lewis Partnership. Archived from the original on 14 February 2015. Retrieved 11 November 2012.
    4. "John Lewis Partnership - Our Business". www.johnlewispartnership.co.uk.
    5. "John Lewis Partnership plc Annual Report and Accounts 2020" (PDF).
    6. "The Sunday Times HSBC Top Track 100 league". FAST TRACK in association with The Sunday Times. Retrieved 19 October 2016.
    7. Kennedy, Carol, "Business Pioneers: Sainsbury, John Lewis, Cadbury", Random House Business Books, 2000
    8. Cox, Peter "Spedan's Partnership, the story of John Lewis and Waitrose", Labatie Books, 2010
    9. McPherson, Hugh (1985). John Spedan Lewis 1885–1963: Remembered by Some of his Contemporaries in the Centenary Year of His Birth'. England: John Lewis Partnership. p. 139.
    10. "John Lewis Partnership - Our history". www.johnlewispartnership.co.uk. Retrieved 5 February 2020.
    11. http://www.johnlewispartnership.co.uk/about/our-founder.html Archived 14 February 2015 at the Wayback Machine accessed 11 November 2012
    12. John Lewis PLC and Tacit Knowledge. "John Lewis Partnership - BBC broadcast". Archived from the original on 14 October 2016. Retrieved 13 July 2016.CS1 maint: uses authors parameter (link)
    13. Brignall, Miles (5 February 2011). "John Lewis: Never Knowingly Undersold?". London: The Guardian. Retrieved 7 March 2011.
    14. "John Lewis Partnership. About Us". John Lewis PLC. n.d. Retrieved 3 November 2016.
    15. See M Pooler, 'Knowingly underpaid? John Lewis hit by cleaners' protest' (27 June 2012) Independent
    16. "John Lewis Partnership - Employee ownership". www.johnlewispartnership.co.uk.
    17. https://www.johnlewispartnership.co.uk/about/how-we-share-power/meet-the-board.html
    18. "John Lewis cuts staff bonus to lowest level since 1953". The Guardian. 7 March 2019. Retrieved 19 March 2020.
    19. "John Lewis staff bonus at 67-year low as more closures announced". The Guardian. 5 March 2020. Retrieved 25 June 2020.
    20. "John Lewis scraps bonus for first time since 1953". BBC News. 17 September 2020. Retrieved 17 September 2020.
    21. "John Lewis rules out float". BBC News. 20 September 1999. Retrieved 6 May 2010.
    22. "Page unavailable". John Lewis Partnership. Archived from the original on 10 February 2012. Retrieved 20 June 2012.
    23. "John Lewis Exeter opens with £7 million of stock". BBC. 12 October 2012. Retrieved 22 March 2013.
    24. "Online grocer Ocado may float next year". Yahoo. Retrieved 20 June 2012.
    25. "Online Ocado shares hit after John Lewis sells stake". BBC News. 11 February 2011. Retrieved 20 June 2012.
    26. Rigby, Emma (29 June 2004). "John Lewis and Waitrose back card launch with website". Marketing Magazine. Retrieved 28 December 2015.
    27. Bachelor, Lisa (19 September 2003). "John Lewis to launch account card". The Guardian. Retrieved 28 December 2015.
    28. "John Lewis starts travel service". BBC News. 3 October 2006. Retrieved 23 August 2009.
    29. Budworth, David (8 October 2006). "Insurance is in stock at John Lewis". The Sunday Times. London. Retrieved 23 August 2009.
    30. Kilner, Richard (30 July 2008). "Greenbee enters car insurance market". Insurance Daily. Retrieved 23 August 2009.
    31. Gallagher, Rosemary (27 October 2007). "Greenbee.com targets niche home insurance market". The Scotsman. Retrieved 23 August 2009.
    32. "Greenbee: Products and services". John Lewis Partnership. Archived from the original on 26 September 2011. Retrieved 23 August 2009.
    33. Farey-Jones, Daniel (17 September 2010). "John Lewis drops Greenbee brand and focuses on insurance". Marketing. Retrieved 6 February 2011.
    34. John Lewis PLC. "Making our own textiles". John Lewis Partnership. John Lewis Partnership. Archived from the original on 6 February 2013. Retrieved 22 March 2013.
    35. John Lewis Partnership, London, 3 September 2007. Accessed: 10 September 2007. Archived 7 October 2011 at the Wayback Machine
    36. Stead workers stunned, Cumberland News, 6 September 2007. Accessed:2007-09-10.
    37. http://www.johnlewismemorystore.org.uk/category/cavendish_textiles
    38. Fry, A J. "Pat Albeck". Archived from the original on 9 August 2016. Retrieved 13 July 2016.
    39. "the textile blog: The Textile Design Work of Jacqueline Groag". Retrieved 13 July 2016.

    Bibliography
    • John Spedan Lewis 1885–1963: Remembered by Some of his Contemporaries in the Centenary Year of His Birth with the editor being Hugh Macpherson. Mainly black and white, colour plates relating to the business of the John Lewis Partnership and links with Waitrose Supermarkets. With a foreword by Peter Lewis. Includes biographies of executives, and an index. Detail from a copy of John Spedan Lewis published by John Lewis Partnership in 1985 with no ISBN.
    • Julia Finch, Andy Street: Humble MD who is never knowingly underpaid (9.3.2008) The Guardian
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