John Lewis boss Sharon White survives staff revolt as losses soar

John Lewis boss survives staff revolt as losses soar: Sharon White given stay of execution as she insists partnership will remain employee-owned

The boss of John Lewis was put on notice yesterday as staff rebelled over the way she has run the company after another year of heavy losses.

In a damning rebuke to Sharon White, representatives who sit on the employee-owned partnership’s council voted against her performance over the past year.

But she was offered a stay of execution as the council, which is made up of around 60 members elected by other staff, backed her to continue.

The ballot came after the John Lewis Partnership, which owns the department store chain and Waitrose supermarkets, suffered a third year of losses and axed its annual staff bonus for only the second time since 1953.

Analysts warned White’s position as chairman has been left hanging in the balance. But, addressing the biannual meeting ahead of the vote, White quoted author Vivian Greene, saying: ‘Life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain.’

Survivor: Under-fire John Lewis chairman Dame Sharon White (pictured) insisted the partnership will always be an employee-owned business

Survivor: Under-fire John Lewis chairman Dame Sharon White (pictured) insisted the partnership will always be an employee-owned business

She added: ‘I love that quote because it says it’s not the tough moments themselves, it’s how you respond to those moments that really counts. It’s a real test of your mettle and the strength of your partnership.’

John Lewis clocked up losses of £234million last year as White lamented inflation ‘hit us like a hurricane’. 

Staff were stripped of an annual bonus, which it has used to reward employees and recruit new ones since 1920.

With unrest mounting, reports emerged White was mulling the end of the partnership’s famous 100 per cent employee-owned status as a mutual, to raise fresh funds from outside investors, fuelling fears over the future of the 159-year-old group.

To allay concerns, White told the meeting at John Lewis’s Odney Club in Berkshire: ‘I want to be absolutely categorical. The John Lewis Partnership will always be an employee-owned business – no ifs, no buts.

‘There is absolutely no question of demutualisation.

‘Our model is the reason I joined the partnership as I believe in a form of kinder capitalism in the 21st century, which demonstrates our ability to combine commercial excellence with social purpose. It’s what makes us special.’

However, she added: ‘If at any point the partnership were unable to fund our plan through our own means the board could consider external investment.’

White, a former civil servant, also expressed ‘profound regret’ that staff did not receive a bonus and conceded the pay situation was ‘unbelievably tough’.

The crisis at John Lewis has sent shockwaves through the industry, with retail consultant Mary Portas warning it has lost its ‘soul’.

Chris Earnshaw, president of the partnership council, said: ‘The council voted in support of the chairman to progress the partnership in relation to its purpose, principles and rules.

‘The council did not support last year’s performance, in which we reported a full-year loss and no partner bonus.

‘The council, chairman and board will continue to work together to ensure the long-term success of the partnership and our employee-owned model.’

White said: ‘If we come together and take the plan forward with confidence and determination – but also with purpose and kindness – we can achieve anything together in the next year.’

Analysts said White’s position was in the balance and, despite receiving backing for the year ahead, she faces an uphill battle to escape unscathed.

Susannah Streeter, at Hargreaves Lansdown, said the rebuke was ‘fiercer than expected’ and White would have to ‘work tirelessly to win back support’. 

She said: ‘It’s clear that turnaround plans will have to be accelerated fast and fresh drivers of growth put in place quickly or patience will wear increasingly thin.’

Danni Hewson, at AJ Bell, said: ‘The economic environment isn’t exactly ideal, but John Lewis has a USP that seems to have become lost and many once-loyal customers have voted with their feet.’

Customer service key to recovery 

Sharon White has been urged to restore John Lewis’s reputation for customer service to revive its fortunes – and save her career.

She has embarked on a foray into property, including plans for homes above shops and on the sites of former Waitrose supermarkets.

In December, she signed a deal with investment giant Abrdn to build 1,000 homes in and around London, as the chain looks to earn 40 per cent of profits from outside retail by 2030.

But analysts have warned that John Lewis needs to get back to its core business of becoming a great retailer, and added that property development is an unwelcome distraction.

The fightback will not be easy – rival Marks and Spencer appears to have finally turned a corner while Dunelm has thrived during the cost of living crunch.

John Lewis is cutting costs, with £900million to be taken out of the business by January 2026. 

To do this White has hired its first-ever chief executive, Nish Kankiwala, best known for ‘fixing’ Hovis.

Known for being brutally tough, he will implement further job losses as well as store closures.

But the problem with slashing staff and costs will be the continued demise of John Lewis’s world-renowned customer service.

Clive Black, analyst at Shore Capital, said: ‘What is John Lewis without its customer service? Simply another soulless High Street retailer.’

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