John Lewis Partnership

2008/9 Schools Wikipedia Selection. Related subjects: Companies

John Lewis Partnership
Type	Public (All shares held in trust)
Founded	Oxford Street, London (1864)
Headquarters	London
Industry	Retail
Products	Clothing, cosmetics, housewares, food, direct services
Revenue	£5.8 billion (2005-2006)
Employees	64,000 ( 2006)
Website	John Lewis Partnership

One of John Lewis' flagship branches in Glasgow's Buchanan Galleries mall

The John Lewis Partnership is a major United Kingdom retailer which operates John Lewis department stores, Waitrose supermarkets and the direct services company Greenbee. Unusually, it is a public limited company that is held in trust on behalf of all its employees (called partners) - who all have a say in the running of the business and receive an annual profit distribution which is usually a significant addition to their annual salary. The type of business is called a co-operative. The chain's image is upmarket, and it appeals strongly to a middle class core of shoppers.

The partnership is an investor in the Ocado web supermarket, which it supplies with Waitrose own-brand foods, and John Lewis own-brand non-food items.

History

The business was founded in 1864 when John Lewis department store founder set up a draper's shop in Oxford Street, London, which developed into a department store. In 1905 he bought the Peter Jones store in Sloane Square. In 1920 his son, John Spedan Lewis, expanded earlier power-sharing policies by sharing the profits the business made among the employees. The democratic nature and profit-sharing basis of the business were developed into a formal partnership structure and Spedan Lewis bequeathed the company to his employees. In January 2006, there were 64,000 partners – most of them full-time – working for the John Lewis Partnership.

The principle and slogan Never knowingly undersold was adopted in 1925. It was created by Spedan Lewis and applied to the company's Peter Jones store. It stated that if a customer could buy the same item cheaper elsewhere they would refund the difference. Today, the company still honours this pledge, and many of their competitors also offer such a pledge. The principle has been more refined, most notably to exclude online shopping. However, they were the only large retailer that would match the price with any UK shop, not restricting it to a local area, until DSGi plc adopted the same policy in July 2007. The policy is also to monitor local competitors and reduce the shelf edge price if they are being 'undersold'. Staff (partners) also get paid £2 for every time they notify the company that they are being 'undersold'.

The present shop on Oxford Street was completed in 1960, the original buildings having been bombed during the war and gradually rebuilt. The sculpture Winged Figure by Barbara Hepworth was added in 1962.

On 27th April 1933 John Lewis Partnership bought Jessop & Son of Nottingham. This store was the first John Lewis outside London. The store kept the name 'Jessops' until 2002, when after a refurbishment and expansion the store was renamed as simply John Lewis. The partnership has also purchased a number of other regional department stores, as well as developing stores in new locations. As of 2005 it has plans to open a new department store every year for the next 10 years, which is probably the most ambitious expansion programme in its history.

In line with other British department store chains, it is nearing the completion of a process of renaming any stores not branded John Lewis ( Tyrrell & Green, Heelas, etc.) with the nationally recognisable name. Peter Jones in London will remain the only exception to this policy when the premises of Knight & Lee are replaced by a new department store in Portsmouth, and following the recent renaming of the Cambridge store (formerly Robert Sayle).

Organisation of the partnership

Every employee is a partner in the John Lewis Partnership, and has a possibility to influence the business through branch forums, which discuss local issues at every store, and the divisional John Lewis and Waitrose Councils. Above all these is the Partnership Council, to which the partners elect at least 80% of the 82 representatives, while the chairman appoints the remaining. The councils have the power to discuss ‘any matter whatsoever’, and are responsible for the non-commercial aspects of the business – the development of the social activities within the partnership and its charitable actions.

The Partnership Council also elects five of the directors on the partnership board (which is responsible for the commercial activities), while the chairman appoints another five. The two remaining board members are the chairman and the deputy chairman. These routes ensure that every non-management partner has an open channel for expressing his/her views to management and the chairman. As well as this, the John Lewis Partnership publishes a weekly in-house magazine, called 'the Gazette'. It is the oldest in-house magazine currently still being published in the UK. Each John Lewis branch also has its own weekly magazine, called 'the Chronicle'.

The John Lewis Partnership has a very extensive programme of social activities for its partners, including two large country estates with parklands, playing fields and tennis courts; a golf club; a sailing club with five cruising yachts; and two country hotels offering holiday accommodation for the partners. Partners are also enrolled in a very favourable pension scheme, receive a death in service insurance, and are given very generous holidays.

Finally, every partner receives an annual bonus, which is a share of the profit. It is calculated as a percentage of the salary, with the same percentage for everyone, from top management down to the shop floor and the storage rooms. Depending on the profitability of the partnership each year, the bonus has been between 9% and 18% of the partners' annual salaries since 2000. According to the preliminary result for the 2005-2006 financial year, which ended 28 January 2006, the partners will receive a bonus for that year which equals almost two months' salary. The remaining profit, after bonus payments and taxation, is always put back into in the business.

In 1999, in response to a fall in profits, there were calls from some Partners for the business to be demutualised and floated on the stock market. If this had gone through, each Partner would have been guaranteed a windfall of up to £100,000 each,in order to compensate them for their share of the business. In the end, no one on the Partnership Council agreed with the idea and only one member spoke in favour of a referendum on the issue.

Financial performance

The John Lewis Partnership's financial year runs from February to January the next year. The percentage figure in the bonus column shows the bonus' value in relation to a partner's salary. 8.33% would mean one additional month's salary and 16.66% would mean two months' salary, showing that the staff has received more than one month's additional salary as bonus each year since 2000.

In the 1983/4 year they broke the £100,000,000 barrier for the first time.

On Monday, 22nd January 2007, John Lewis Edinburgh became one of the few shops in the UK to take over £100 million in one year. While not the first John Lewis store to reach this milestone, it is a huge achievement for the branch.

Financial section of John Lewis' website: .

Department stores

As of January 2007 the John Lewis division operates 26 full-line department stores and a webstore. The stores are in a mixture of city centre and regional shopping centre locations. They are generally the largest or second largest department store in their local market. The flagship Oxford Street store in London remains the largest John Lewis outlet in the UK. . As well as the John Lewis department stores the partnership operates five Waitrose Food & Home stores combining the group's Waitrose supermarkets with some the John Lewis chain's non-food ranges.

Supermarkets

The John Lewis Partnership also owns Waitrose, an upmarket supermarket chain which has 187 branches (Nov 2007) and 35,573 (summer 2006) partners. Waitrose trades mainly in London and the South of England, and was originally formed by Wallace Waite, Arthur Rose and David Taylor. The company was taken over by The John Lewis Partnership in 1937. The acquisition of 19 Safeway branches in 2004 greatly increased the size of the company and saw branches open in the North of England for the first time. A further six stores were purchased from Morrisons in Autumn 2005 and again helped the march into previously unexplored territories. Then, in March 2006, Waitrose announced the purchase of five stores from Somerfield, with the first two stores in Scotland, both of which are in the capital, Edinburgh. In July 2006, Waitrose announced the purchase of six more stores and a distribution centre from Morrisons. In 2007 the first purpose built Waitrose Supermarket in the North of England opened at Cheadle Hulme, Greater Manchester.

Direct services

On 3rd October 2006, the Partnership launched a new direct services company named Greenbee, providing home and travel insurance (with AXA), theatre tickets and travel services (in association with Expedia).

Credit cards and account (store) cards

Unusually, John Lewis department stores did not accept Visa and MasterCard credit cards until 1999, previously only accepting the John Lewis Account Card (a form of charge card) and the Switch (now Maestro) and Delta (now Visa Debit) debit cards.

On 28 March 2004, the John Lewis Partnership announced the launch of their own credit card — the Partnership card. This was launched with HFC which is a division of the banking giant HSBC. It was launched as a MasterCard with a choice of four designs (effectively four different colours).

The credit card follows on from, and supersedes, the John Lewis (and Waitrose) account cards which have been around for 40 years. These cards are no longer available, and holders of these are being encouraged to replace them with the Partnership card. They can, however, still be used, and some cards from the mid-1970s are still in use.

The Partnership card is designed as a cashback credit card, with 6 months interest free credit and a 16.9% APR. It offers a 1% rebate for purchases at stores (including online stores) that are members of the John Lewis Partnership (such as John Lewis and Waitrose). For purchases at other stores it offers a rate of 0.5%. The rebate is awarded as vouchers which can be spent in a store of the John Lewis Partnership. Vouchers are earned by accumulating points, with 1 point awarded for every £1 spent in John Lewis Partnership stores, and every £2 spent elsewhere. 500 points earns a £5 voucher . Earned vouchers are sent to card holders by post and can be spent in a store of the John Lewis Partnership.

Manufacturing

The John Lewis Partnership currently operates one manufacturing business, Herbert Parkinson, in Darwen, Lancashire. This company, established as a weaver of jacquard fabrics in 1934, was acquired by the partnership in 1953. Herbert Parkinson currently produce John Lewis own brand fabrics and curtains as well as filled furnishing products such as cushions and pillows. The company operates a wholesale business to outside customers in addition to supplying John Lewis Partnership branches.

Until September 2007, the partnership also owned textile production businesses Carlisle-based printer Stead McAlpin and Haslingden, Lancashire-based weaver J H Birtwistle. In spite of considerable capital investment and significant improvements in efficiency, neither had been profitable for almost 10 years. The newly-formed Apex Textiles acquired both firms.

John Lewis Partnership's Martin Phillips, Managing Director of both Stead McAlpin and J H Birtwistle, announced that both businesses "would continue to trade from their current sites" following their sale, adding "We have supported the textile industry in the North West for many years and we recognise that the partners (employees) who work at the two businesses are skilled people whose expertise should remain in the region...The new owners will provide a high degree of textile manufacturing expertise and the opportunity to develop new markets." As part of the press release John Lewis announced their intention to retain both businesses as key suppliers once they were under new ownership and to agree ex gratia payments to ‘partners’ at the affected sites.

The 132-year-old Stead McAlpin’s 200 workers ‘were stunned’ to find the factory was to be sold, the Cumberland News reported on 6 September. Manchester-registered Apex Textiles had been formed specifically to buy the former John Lewis textiles businesses, the paper added, quoting its Managing Director, Jim Kidd, as saying “We...look forward to combining our extensive knowledge, understanding and experience of this sector to the established platform that has been built up by the John Lewis Partnership."