The department store chain John Lewis is axing 270 jobs, just as it changes its name to “John Lewis & Partners” to highlight it is owned by its employees.
The blow to staff came as its upmarket rival Fenwick confirmed plans to shed 408 jobs as part of a shake-up at the 136-year-old family business where profits collapsed last year.
John Lewis is stripping out back office jobs in IT, finance and store security from its 50 departments stores, with 270 roles affected by the changes, the Guardian has learned. The awkward timing, with colleagues informed in recent days, coincides with the fanfare surrounding a multimillion-pound rebrand of the mutual, which also owns Waitrose.
The new brand names, by which Waitrose becomes Waitrose & Partners, are to reinforce the idea that being employee-owned makes the company different. The overhaul is being backed by the group’s biggest advertising campaign apart from Christmas, when John Lewis is famous for its blockbuster ads.
The new advert, which features children performing a school play to the sound of Queen’s Bohemian Rhapsody, and ends with the line “for us, it’s personal”, is the first one to feature John Lewis and Waitrose together.
The jobs cuts come at a difficult time for the department store sector, which is under pressure as online sales make it harder to turn a profit from large high street outlets, many of which incurred hefty increases in business rates – the commercial equivalent of council taxes – as a result of last year’s revaluation.
At the same time, shoppers have reined in spending on clothing and household goods because of a squeeze on spare cash and a shift to renting rather than owning homes. This perfect storm saw House of Fraser collapse into administration last month, only to be rescued by the discount sportswear giant Sports Direct. Debenhams, which has issued three profit warnings this year, is also cutting jobs.
At Fenwick the job losses, first reported by industry magazine Retail Week, equate to more than a 10th of the Newcastle retailer’s 3,300-strong workforce. They come after profits plummeted from £30.4m to £2m in the year to 26 January. Sales fell 3.6% to £411m at the chain, which has nine stores including its Newcastle flagship.
Fenwick’s changes also involve back office tasks being handled centrally rather than in individual stores. The plan is being pushed through by Robbie Feather, who joined Fenwick from catalogue chain Argos in January.
“Our annual results reflect the challenging market conditions all department store groups are facing,” said a Fenwick spokesperson, who said the group, which does not sell online, was investing in a new website. “We have restructured parts of the business and have made the difficult decision to cut staff numbers.”
In June, John Lewis issued a profit warning stating that annual profits would be substantially lower than last year due to the tough trading climate as well as a programme of heavy investment. It intends to pump up to £500m a year into refurbishing its stores and website, as well as developing new products and services.
“We are currently speaking to a small group of branch partners about proposals within our back-of-house operations to ensure a more efficient way of working,” said a John Lewis spokeswoman who said the reorganisation would also create 70 jobs. “We will be doing everything we can to support those partners impacted by actively helping them to look for other roles across the partnership.”
