Sharon White has suffered a show of no confidence in her leadership of John Lewis Partnership Plc after employee representatives said they did not support the retailer’s performance last year.
(Bloomberg) — Sharon White has suffered a show of no confidence in her leadership of John Lewis Partnership Plc after employee representatives said they did not support the retailer’s performance last year.
A council of around 60 staff members said they were not confident that the owner of John Lewis department stores and upmarket grocer Waitrose had made any progress last year, when it reported a loss for the third year in a row and failed to pay bonuses to staff.
The council did, however, support White’s future strategy as she tries to turn around the struggling retailer during Britain’s cost-of-living crisis.
White cannot be ousted as a result of the vote alone, but it is a warning shot from the partnership’s 74,000 employees, who are also owners of the business, that they are concerned by recent developments.
Previous chairman Charlie Mayfield scored around 65% and 75% in similar votes in 2019.
The partnership declined to reveal what percentage of partners backed White’s future strategy.
“This is a really bad day for John Lewis. It’s nothing but bruising really as this sort of washing dirty linen in public is not something that tends to happen in private companies,” said Clive Black, retail analyst at Shore Capital.
“For John Lewis to get itself into this situation is more than unfortunate, but partners are clearly voicing that they are not happy with her.”
White, a former telecommunications regulator who took the reins at John Lewis in early 2020, has had to try and restructure a business in a highly competitive market where consumer shopping habits are changing fast.
She has been selling stores and reducing staff as part of her overhaul. White is also diversifying into real estate and financial services, a strategy that has yet to bear fruit.
Reports surfaced in March that the partnership could try to raise at least £1 billion ($1.3 billion) through a minority stake sale.
Read more: John Lewis Said to Weigh Stake Sale, Diluting Employee Ownership
Speaking to employees at the council meeting, White said she “acutely” felt the responsibility of managing a business which has been owned by its employees for more than seven decades and whose scale and model “cannot be found anywhere else in the world.”
“Last year was tough and many businesses failed to make it,” she said, assuring partners, who have not been paid a bonus in two of the last three years, that the group will always be employee-owned.
Any external investment will have to comply with the constitution governing the business, she said.
Faster inflation, which White said came like a “hurricane” last year, is also weighing on the business.
Waitrose is particularly struggling to attract customers as it was slower than competitors to keep a cap on rising grocery prices.
To get a grip on the problems, John Lewis has appointed a chief executive officer — Nish Kankiwala — for the first time in its history to bolster the turnaround.
He has led previous turnaround efforts as CEO of bread maker Hovis Ltd. and through a senior role at Burger King Corp.
Chris Earnshaw, president of the partnership council, said the voting on the chairman’s progress is “central to how we exercise our democratic principles and ownership of the business.”
–With assistance from Julian Harris.
(Adds appointment of CEO in 11th paragraph.
An earlier version corrected the profession of Vivian Greene)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
