John Lewis bosses are deciding which of their 50 stores will re-open after the coronavirus lockdown eases, with it being ‘highly unlikely’ all of them will survive.
The High Street giant was forced to close all 35 of its department stores and 15 smaller John Lewis At Home shops when Britain went into lockdown in March.
It saw 400 staff made redundant and another 14,000 furloughed.
But today retail bosses were making tough decisions on which stores will be shut for good – even when social distancing measures ease up.
John Lewis has consistently struggled with rising bills for rents, rates and staff in recent years – a tough environment that has also taken a toll on its department store rivals.
Pictured: John Lewis’s closed Oxford Circus store in central London is pictured this week
Dame Sharon White, the new chairman of the John Lewis Partnership (JLP) and her team are set to address analysts in the City on Wednesday, updating them on the company’s performance during the past week.
There has also been speculation that Dame Sharon will need to tap up customers and financial institutions, through a corporate bond, for extra cash.
The Times reported on Monday that the former Ofcom chief is seeking out views to see if investors are willing.
A previous bond was launched in 2011 with a 4.5 per cent interest rate and 2 per cent in store vouchers.
JLP also includes Waitrose, which has fared better during the lockdown, due to remaining open.
However with a major ramp-up of online operations, discussions are under way on whether it will be financially viable to reopen department stores.
Several Waitrose stores have already been closed in recent years.
Veteran retail analyst, Richard Hyman, explained: ‘Does it make sense for John Lewis to close some stores, absolutely yes.
‘No one wants to see people losing their jobs which is what would happen, but the reality is for the market at large, online has been getting bigger and bigger, with John Lewis at the vanguard.’
He pointed out that 30 per cent of all retail is already online, adding ‘for John Lewis that number was short of 50 per cent before Covid-19, although now it’s at 100 per cent.
‘The reality is the retail world we are all moving into means every retailer needs fewer stores than it did before, including John Lewis, and not addressing this problem puts the rest of the business in jeopardy.’
Shortly after arriving at John Lewis Partnership earlier this year, Dame Sharon already warned the company is facing the most challenging period in its history.
She added in February that stores are unlikely to remain open without financial improvements.
Her statement said at the time: ‘We need to reverse our profit decline and return to growth so that we can invest more in our customers and in our partners. This will require a transformation in how we operate as a partnership.
‘These are the most challenging but exciting times in retail for a generation.’
JLP said in a statement today: ‘We keep our estate under continuous review in order to ensure we have the right amounts of shops to best serve our customers and remain commercially viable.
‘It is too early to make a decision but, as always, any decision that is made is done with securing the long-term financial sustainability of the Partnership and is always communicated to our Partners first.’
Earlier this year, the chain decided to hand almost £1million to its former managing director Paula Nickolds, despite staff losing their jobs and sales tumbling by a third.
John Lewis paid out £939,773 to Paula Nickolds, who was ousted from the department store business in January.
The group also confirmed an £892,362 pay packet given to Rob Collins, who had been managing director of the group’s Waitrose supermarket arm until he stepped down in October when the group’s restructuring was announced.
The chain decided to hand almost £1million to its former managing director Paula Nickolds (pictured), despite staff losing their jobs and sales tumbling by a third
Although John Lewis operations have ground to a halt during the pandemic, Waitrose has seen sales rocket with Britons stocking up on essentials.
The supermarket’s sales increased by eight per cent in the period since January 26, with the chain offering dedicated shopping hours for NHS workers and the vulnerable.
The Mail On Sunday revealed over the weekend that John Lewis bosses had drawn up a blueprint for its reopening.
Andrew Murphy, John Lewis Partnership’s executive director of operations who has led the crisis strategy, said the chain could begin reopening some stores as soon as the middle of next month.
But it now looks unlikely that the chain will emerge from the crisis without store closures and job losses.
Although John Lewis operations have ground to a halt during the pandemic, Waitrose (Kensington store pictured in west London) has seen sales rocket with Britons stocking up on essentials