22 Feb John Lewis considering fresh store closures in response to Covid
John Lewis is understood to be considering a fresh round of store closures, underscoring the toll that the pandemic is taking on Britain’s deserted high streets.
The 156-year-old retailer is understood to be reconsidering the scale of its national network of branches, less than eight months after it announced the closure of eight stores to cope with the impact of coronavirus.
Up to eight more of its 42 remaining outlets could now be closed down, the Sunday Times reported, as the John Lewis Partnership, which also owns Waitrose, considers cutting space and costs by moving into smaller sites.
John Lewis declined to comment, but any closures would be a new blow to Britain’s beleaguered high streets, after the recent demise of Debenhams and Philip Green’s Arcadia chain, which have been bought by online specialists Boohoo and Asos and will disappear from shopping streets.
The consent of the company’s landlords will be key in any plan by John Lewis to shut shops. But the downsizing plans could be revealed alongside the company’s annual results, due on 11 March, when the extent of the damage wreaked by the pandemic will become clearer.
While online retailers such as Amazon and Ocado have thrived amid successive lockdowns, owning a national network of branches has hit retailers like John Lewis hard.
The impact of Covid-19 came at the worst possible time for the company, which was already facing mounting problems from online rivals. It had reported its first ever half-year loss in September 2019.
In September last year, after the first lockdown, the company said sales were holding up well, as online sales had surged.
But the impact of that success has hit the stores hard. Before the pandemic the store group calculated that £6 out of every £10 in sales was linked to browsing in stores. But last autumn the group said that Covid had cut the sales linked to stores to just £3 out of £10.
As a result the group slashed the notional value of its bricks-and-mortar shops by £470m – which pushed the company to a huge £635m half-year loss.
The slump into the red meant that John Lewis said it would cancel the annual bonus it awards to staff this year for the first time since 1953.
With the company at a crossroads, Dame Sharon White, the chairman, wielded the axe over eight stores.
The shop closures came at a cost of 1,300 jobs, with shops in Croydon, Watford, Newbury, Swindon and Tamworth shutting their doors, as well as small hubs at Heathrow airport and London St Pancras station.
A new store in Birmingham, where the department store’s former managing director Andy Street is mayor of the West Midlands, was also shut down.
White is hoping to revive the group’s fortunes with a move into property, converting nearly half of the company’s flagship department store on London’s Oxford Street into office space. There are also plans to build homes for rent alongside some of its supermarkets.
According to a report released last month, England’s high streets could lose up to 400,000 retail jobs as a result of more people working from home and shopping online after the coronavirus pandemic, with affluent towns in the south among the most vulnerable.
The UK Treasury is exploring options for an online sales tax in response to an explosion in internet shopping, as Covid-19 accelerates the closure of high street shops across the country.