New John Lewis boss Sharon White faces biggest crisis in its history

New John Lewis boss faces biggest crisis in its history: Can Sharon White save 156-year-old chain?

The crisis engulfing John Lewis lays bare the task facing retail novice Dame Sharon White as she prepares to take over the 156-year-old chain.

The ex-civil servant will next month succeed Sir Charlie Mayfield as chairman of the John Lewis Partnership, which is made up of the department stores and Waitrose supermarkets.

But analysts warned she has her work cut out as the group battles to turn around its fortunes. 

Dame Sharon White will next month succeed Sir Charlie Mayfield as chairman of the John Lewis Partnership, which is made up of the department stores and Waitrose supermarkets

In a bleak update yesterday, John Lewis announced the departure of department store chief Paula Nickolds, told staff they may not get a bonus for the first time since it was introduced in 1953, and warned profits would be ‘significantly lower’ than last year.

The developments highlight the challenges facing White, who joins the much-loved High Street chain from communications regulator Ofcom, where she has been chief executive since 2014.

Independent retail analyst Richard Hyman said: ‘There is no doubt Sharon is talented, but with no first-hand commercial experience, she has a real mountain to climb.’

The shock departure of Nickolds – after 24 years at the department store chain, including three as managing director – followed a 2 per cent slide in Christmas sales. 

Fortnum & Mason fizzes

Fortnum & Mason has cashed in on the growing trend for non-alcoholic drinks, as it revealed one in nine bottles of fizz it sold over Christmas was faux.

Champagne sales increased by 10 per cent across the Queen’s corner shop in the five weeks to 29 December. 

And almost a tenth of the bottles of fizz sold was Fortnum’s non-alcoholic sparkling tea.

Across the whole of Fortnum’s, sales climbed by 15 per cent. 

Its bricks-and-mortar stores saw growth of 13 per cent.

Just three months earlier the managing director of Waitrose, Rob Collins, stepped down. 

Although Waitrose enjoyed a better Christmas, with sales up 0.4 per cent, White joins a partnership where the top team of Mayfield, Nickolds and Collins have left.

The partnership suffered a £26million loss in the first six months of the year – its first ever half-year loss.

Bosses yesterday warned annual profits would be ‘significantly lower’ than last year when they fell 45 per cent to £160million. 

The appointment of 52-year-old White, who won plaudits for her work at the Treasury before joining Ofcom, raised eyebrows in the City as she has no retail experience.

She will face vital decisions from day one, including whether to deny staff a bonus, which fell from 20 per cent of salary in 2008 to just 3 per cent last year. 

She will be confronted with subdued markets in fashion, electricals and home technology, as well as tough conditions on the High Street caused by rising costs and low consumer confidence. 

John Lewis’s web investment will also need to be turbo-charged, after the department store arm posted online sales growth of just 1.4 per cent over the Christmas period. Waitrose fared better with a 16.7 per cent rise.

The ‘Never Knowingly Undersold’ price pledge at John Lewis, which sees all prices matched to other off-line prices, will also need to be placed under careful scrutiny, analysts said.

John Lewis margins have been shredded as it matches deep price cuts put in place by distressed rivals such as Debenhams and House of Fraser.

Julie Palmer, partner at Begbies Traynor, said: ‘A company that was once placed on a pedestal as the future of retail by government and analysts has had its legs taken from under it.’



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