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News analysis: The ups and downs of retail giants John Lewis and M&S

News analysis: The ups and downs of retail giants John Lewis and M&S

Not too many years ago, the John Lewis Partnership (JLP) seemed unstoppable, while M&S seemed to be in a never-ending phase of change. Today, the tide is reversed as JLP struggles and a reinvigorated M&S appears to be going from strength to strength.

john lewis

M&S is linking up with new brands, reporting higher sales and profits, increasing e-sales and gaining market share. JLP also reported rising fashion market share through its John Lewis department store, but that came alongside mounting losses, talk of upcoming job cuts and the hiring of a CEO who’s known for making the tough decisions an employee-owned business might encounter. hard to take

So what happened to turn their fortunes around, and what went wrong and what was right for the two companies?

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The disappearance of rival department store chain Debenhams from physical retail and the shrinking of the House of Fraser chain should have been good news for the John Lewis chain, leaving it dominating the mid-market department store landscape. Instead, that landscape was pared down to the point that even some branches of John Lewis seemed superfluous. The result? Store closures.

And the department store model has been transformed, fueled by previously single-brand businesses like M&S (plus Next and a host of online-only players). They now offer several brands that they own, license, or stock wholesale through a new department store model that directly impacts John Lewis.

That new-style model focuses on super-categories (like fashion and beauty) rather than underperforming categories (like electrical goods and large furniture). M&S seems to have an advantage here compared to John Lewis with its broader category.

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JLP was one of the pioneers, and a winner, in e-tail. But that was always likely to present him with a future dilemma. Unlike a company like Next, which has long balanced catalog with store sales and seamlessly adapted to online stores, JLP was a store-based company. Its success online meant that expensive brick-and-mortar spaces brought in less revenue. After some painful store closures, his 60:40 online/store mix still leaves him needing to rethink his stores (more on that below). For M&S, online still only accounts for about a third of sales. JLP’s higher percentage means it also has to deal with the high level of returns and higher compliance costs that come with a large web-based business.

M&S, by contrast, was heavily criticized for being late to the online party, but because it was late, it is still enjoying online growth with a clear track for future growth as well.



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Both JLP and M&S have been closing stores (including John Lewis and Waitrose by JLP). But M&S ​​has arguably been more radical here and is further along in the streamlining process. The need to reduce space arose quickly at JLP. For example, one store that closed in 2020 (Birmingham Grand Central) only opened in 2015 after a £35m investment.

However, it is important to note that M&S ​​is now also opening new branches. And while many are just for food, it’s also adding a new space for Clothing and Home in key locations. It is taking over a former Debenhams branch in the Liverpool One shopping center for a new 100,000-square-foot state-of-the-art store.

M&S has a network of 1,487 stores (and 98 websites too, after a recent massive expansion) compared to 34 John Lewis stores plus one outlet and 332 Waitrose stores. At a time when physical shopping is picking up post-Covid in ways few thought likely, M&S with far more stores than JLP is well positioned to take advantage of this. Not that the latter is neglecting the shops. It has invested in its department store branches and the newly renovated 47,000-square-foot Horsham John Lewis, with the new design the result of working with neuroscience experts to help enhance areas of the store with sensory elements is a clear sign of which is rethinking your store space for both the 2020s and 2030s.

As mentioned, M&S appears to be further along in its store remodeling journey with a long way to go for John Lewis.


It’s not all bad news for John Lewis. Midsize companies would be expected to feel the pinch in the face of the cost of living crisis. But that crisis does not seem to have weighed on them too much. M&S recently said its customers are resilient and can keep spending.

While the same is likely true for JLP, you will still find some buyers who would rather switch. But it has addressed this with the launch of its John Lewis Anyday budget line. The Anyday range of interiors and fashion means that if customers want a change, they can at John Lewis. It seems to have gone well.

The Anyday–John Lewis line

It is also important that JLP said during its last earnings announcement that people are buying in all of its price ranges. Over 70% of Anyday Fashion customers also purchased their own mid-tier John Lewis & Partners brand last year and over 75% also purchased brand name items, demonstrating that consumers continue to purchase at higher prices.

But one problem for JLP is that groceries are a bigger part of its overall business and in an inflationary environment, with shoppers flocking to Aldi and Lidl, that’s a negative.


Both retailers face intense competition in the fashion (and beauty) arena, but they are also investing heavily in the key pillars of their businesses.

And while M&S has never really been at the forefront of trends, it seems to be the one with the momentum behind it right now.

Under former CEO Steve Rowe and his successor Stuart Machin (the former a long-term member of the company, the latter a five-year member) he has been able to leverage his status as an expert on key categories to promote them above all else. which might work in a traditional department store. His Goodmove sportswear, knits, bras and denim are examples here.

And while John Lewis has always sold outside brands, M&S’ recent inclusion of them has given consumers additional reasons to shop with the chain. John Lewis is no slouch in fashion but as mentioned the momentum is with M&S.


M&S spent a lot of time in recovery mode and saw a lot of big changes. But while that was going on, JLP was riding high. For him employee-owned business, the sea change has occurred more recently.

Upon her arrival in 2020, Chairman Sharon White restructured and ended the model in which department stores and supermarkets were run almost as separate businesses (something that has never been the case with M&S Food, Clothing and Home operations). ).

M&S x Ghost

New faces have also been recruited and change is still happening with the recent departure of John Lewis head Pippa Wicks and a new JLP CEO announced this week.

M&S has also seen many management changes over several decades, but its big changes in recent years have been driven by insiders who have been in the business for years, who know its people and its culture.

It will be interesting to see how JLP’s new (and first) CEO Nish Kankiwala fares. His appointment after Wicks’ departure (with unconfirmed reports of culture clash) is interesting. She had been seen as an expert in shifting to drive the chain forward. The new CEO comes from a very different background in consumer goods and food. He has been known to make tough decisions in his own career that could worry JLP staff who know job cuts are coming. But his experience as a non-executive at the company for two years suggests there may be fewer culture clashes, despite the tough decisions to be made.


Sharon White has said that JLP is undergoing the “largest scale of change” in its century and a half of history. That shift includes branching out of retail into the rental housing market. But his main experience is as a retailer and he’s clearly still a big player here with total sales of £12.25bn last year and John Lewis-specific sales of £4.94bn.

While it appears to be struggling due to the scale of its ongoing losses, it seems too early to call it off. And that is where the comparison with M&S is also relevant. Observers dismissed that business for years (even decades) until he proved them wrong. And even Next, the main street stalwart who is always held up as an example of an unstoppable success story, has had its ups and downs.

It is clear that JLP is currently facing a challenge and that turning around a ship of its size is not something that happens in a matter of a few months. It will certainly be an interesting process to watch from the sidelines.

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