John Lewis not producing sufficient profit, new chief warns

The newly appointed boss of John Lewis has warned that the division retailer and grocery group is “fundamentally not producing sufficient profit” as a confidence vote within the chair’s management and revival plan approaches subsequent month.

Nish Kankiwala, the lossmaking retailer’s first chief executive, talking a month into his position, stated fast change was wanted on the employee-owned firm.

“Partners and customers love our business and want it to do better, but we’re currently not delivering the profit we need to,” he stated in an interview with the Gazette, the retailer’s inner weekly journal, seen by the Financial Times.

“Profitability is crucial so that we can invest in our partners, in our infrastructure and technology, which we’ve really got to accelerate, and because retail is so tough and competitive right now, we have to act at pace.”

The chief government’s remarks got here after the group’s “happiness” scores, recorded in a workers ballot, fell beneath 2022 ranges, as the corporate prepares to carry a twice-yearly vote of confidence within the technique underneath the chair’s management.

The mutual, which owns the eponymous malls and grocery store Waitrose, posted an annual pre-tax lack of £234mn final 12 months with total gross sales down 2 per cent to £12bn. In March, it cancelled its prized staff bonus for the second time in three years and warned of job cuts.

The retailer is 2 years into a turnround plan spearheaded by chair Dame Sharon White, though Kankiwala’s transient is to make sure that the “executive [team] as a whole delivers the overall commercial plan”, he stated, and assist to return it to profitability.

More than 45,000 workers took half in its spring survey. They highlighted that the mutual had “work to do” when it got here to rewards, technique and transformation.

A John Lewis Partnership spokesperson stated: “The survey is one important way of hearing how our partners are feeling, which is core to our democratic principles. There are some encouraging results and we’ll be working closely with our partners to address the areas we need to improve.”

The partnership’s council, which represents the pursuits of all 74,000 workers, will solid two confidence votes on 9-10 May. These are symbolic, nevertheless, and a method of expressing the council’s view.

“One [vote is] looking back and expressing confidence in the progress of the partnership under the chairman’s leadership over the past year,” Chris Earnshaw, president of the council, stated within the Gazette, “and one looking forward, supporting the chair to progress the partnership under their leadership.”

Last 12 months one vote was held in May, regarding the chair, and one in September, in regards to the technique, however the course of has been overhauled this 12 months.