John Lewis chair Sharon White warns staff of store closures and job cuts

In a letter to staff seen by the London Evening Standard, White told the mutual’s 8,000-strong workforce that its annual bonus is likely to be axed next year alongside a raft of other cost-saving measures.

The news came alonside revelations that hundreds of jobs will also go at fashion giant Arcadia and department store business Harrods.

White said the department store chain, which confirmed today its plans to reopen its Oxford Street store on July 16 alongside nine other stores, was unlikely to reopen all of its 50 stores after lockdown.

White wrote: “The difficult reality is that we have too much store space for the way people want to shop now. As difficult as it is, we now know that it is highly unlikely that we will reopen all our John Lewis stores. Regrettably, it is likely that there will implications for some partners’ jobs. We are in active discussions with landlords about ending some leases and renegotiating others to make the terms more flexible.”

White said that although the government support through the furlough scheme and business rates freeze had helped during the crisis so far and trade had been better than its worst forecast scenario, the business expected “trading to be tougher in the second half of the year”.

The letter said: “There is clearly a lot of uncertainty but as things stand, it is hard to see the circumstances where we will be able to pay a bonus next year. I know this will be a blow for partners who have made sacrifices these past months.”

The retailer also plans to shut one of its London offices in Victoria, which 450 staff worked from prior to the coronavirus lockdown. The larger Victoria office, where 2,400 staff work, will remain open.

White said the business’ cost-cutting was driven in part by the “reasonable assumption” that online sales would make up as much as 70% of John Lewis’ sales over this year and next.

Her letter concluded: “The pandemic has led to profound shifts in the way we all live and shop, even our sense of self. While this coming period of transformation will sadly mean the end of some partnership stories, we have to change for the future of the partnership. We have to resize the business – facing into and not shying away from difficult decisions – and seize the opportunities to regrow. The prize is a sustainable partnership that is still thriving in 100 years.”