John Lewis will always be owned by staff, says bosson May 10, 2023 at 1:38 pm

The boss of John Lewis will face a vote of confidence on Wednesday, amid growing staff anger at her leadership.

It comes after Dame Sharon White was understood to be considering selling a stake in the retailer, meaning it would no longer be fully owned by staff.

John Lewis is seeking to revive growth after posting a huge loss last year and suspending its staff bonus.

But as job cuts loom, employees may use the biannual vote – which is non-binding – to push for change.

As well as owning a stake in the business, John Lewis staff – also known as partners – have a voice in the way it is run.

They elect councillors who twice a year meet to scrutinise the company’s performance and pass a vote of confidence in its leadership.

Wednesday’s vote will be held during the all-day meeting, at the Odney Club, a John Lewis-owned retreat near Maidenhead, Berkshire.

Ahead of the vote, John Lewis said it kept its future funding needs under review.

“But nothing is happening in the short term. Right now we are focused on continuing to deliver the best possible experience for our customers while improving the performance of our business,” it added.

The ballot comes at an awkward time for Dame Sharon, who has chaired John Lewis since 2020 and is trying to turn around its fortunes.

The chain has been struggling to compete with High Street rivals such as Amazon and Primark, while its supermarket chain, Waitrose, has underperformed Tesco and Aldi during the cost of living crisis.

The partnership posted its first annual loss, of £517m, in 2020 and has since announced a series of store closures. It also plans to cut £900m of costs by January 2026 and job losses are likely.

The retailer sparked anger in March, when it told its about 85,000 partners they would have to go without a bonus for the second time in three years.

Some 85% of fewer than 1,000 staff surveyed at the time said they were not confident in the company’s ability to deliver its strategy.

Dame Sharon has suggested ways the partnership might revive growth, including developing flats above John Lewis shops.

She has also indicated she would consider raising funds by selling a stake in the business, sparking a negative reaction from retail experts.

In March, brand expert Mary Portas wrote an open letter to the partnership, saying one of the most “valued, loved, and trusted retail brands” in the UK had “let go” of its soul.

Meanwhile, Andy Street, managing director of the retailer from 2007 to 2016, said the proposed change would be a “tragedy”.

GlobalData retail managing director Neil Saunders, a former partner at John Lewis, said while Wednesday’s votes were not unusual, this time there was a “bit of doubt” about the outcome.

A vote against Dame Sharon would not necessarily mean she would have to resign. But, Mr Saunders said, it would add “a lot more pressure and it shows that the partners are not really confident in the direction that she is taking the business”.

He said the two main concerns from partners were:

“It’s supposed to be a business that is solely owned by the partners and doesn’t have to answer to outside financial investors,” Mr Saunders told BBC Radio 4’s Today programme.

“A lot of partners are very concerned about that because it really contradicts the ethos and spirit of the partnership.”

There was a sense John Lewis had been a “bit on the back foot” and slow to react to changes in the retail markets compared with its rivals, such as Marks and Spencer, Mr Saunders added.

John Lewis has said its partnership model “will always be the heart of our business” and there is no guarantee it will seek outside investment.

At Wednesday’s meeting, councillors will quiz Dame Sharon and other executives about the retailer’s performance, then vote on whether

Members can answer on a scale from “strongly agree” to “strongly disagree”, opening the door to a potential rebellion.

The John Lewis Partnership does have the power to remove Dame Sharon, by tabling a resolution on the partnership’s constitution, but this is considered unlikely.