John Lewis Partnership

Not to be confused with Lewis's.

John Lewis Partnership

Type	Private[1] (All shares held in trust)
Industry	Retail
Founded	Oxford Street, London (1920[2])
Founder(s)	John Spedan Lewis
Headquarters	London, England, UK
Key people	Charlie Mayfield (Chairman)
Products	Clothing, cosmetics, housewares, food, direct services
Revenue	£6.74 billion (2009-2010)[3]
Net income	£621 million (2009-2010)[4]
Employees	76,500 (2010)[5]
Divisions	Waitrose John Lewis
Website	John Lewis Partnership

The John Lewis Partnership is an employee-owned UK partnership which operates John Lewis department stores, Waitrose supermarkets and a number of other services. The company is owned by a trust on behalf of all its employees — known as partners - who have a say in the running of the business and receive a share of annual profits, which is usually a significant addition to their salary. The group is the third largest UK private company in the Sunday Times Top Track 100 for 2010. ^[6] Additionally, John Lewis also has the distinction of being UK's best high-street website after beating M&S in October 2010. ^[7] The chain's image is upmarket, and it appeals strongly to middle and upper class shoppers. Recently, however, John Lewis has broadened its marketing strategy towards all types of buyers, with the introduction of the 'Value' range to John Lewis and the 'Essential' range to Waitrose, and with the expansion of the business.

The partnership also supplies the Ocado web supermarket with Waitrose own-brand foods and John Lewis own-brand non-food items.

History

The business was founded in 1864 when John Lewis 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. As of 2011, there are 76,500 partners – the majority full-time – working for the John Lewis Partnership.

The principle and slogan Never knowingly undersold was adopted in 1925. It applied to the company's Peter Jones store. It echoes an advertisement of 1846 by John Lewis subsidiary Bainbridge of Newcastle upon Tyne that stated that 'Bainbridge and Muschamp are resolved that they will not be undersold by any House in the Kingdom'.^[8] 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 retailers who only trade through online shopping. The pledge has recently been revised to include extended insurance and delivery charges when comparing undersale values^[9]. However, they were the only large retailer that would match the price with any UK shop, not restricting it to a local area, until DSG International 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'.

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 27 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.^[10] 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. In addition to this, upon completing 25 years of service for the company, partners are given a paid 6 month break.

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. The bonus is dependent on the profitability of the partnership each year, varying between 9% and 20% of the partners' annual salaries since 2000.The Annual Partnership Bonus for 2007 was the top end 20%, this is before the recession started. The Annual Partnership Bonus for 2008 was 15% of a partner's gross earnings for the 2007/2008 financial year. The Annual Partnership Bonus for 2009 was 13% of a partner's gross earnings for the 2008/2009 financial year. The Annual Partnership Bonus for 2010 was 15% of a partner's gross earnings for the 2009/2010 financial year.

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.^[11]

In the year 2007-2008, the managing director of John Lewis, Andy Street, who has worked since leaving university in 1985, was paid £500,000, plus the 20% bonus of £100,000.

Financial performance

Financial year	Turnover	Profit before tax	Net profit	Partner bonuses	Profit retained
2010-2011	£8.2billion	£431million	tbc	£194.5million (18%)	tbc
2009–2010	£7.4billion	£389million	£306.6million	£151.3million (15%)	£155.3 million
2008–2009	£7 billion	£279.6 million	£580 million	£125.5 million (13%)	£146.0 million[12]
2007–2008	£6.8 billion	£379.8 million	£320.4 million	£181.1 million (20%)	£198.7 million
2006–2007	£6.4 billion	£319.2 million	£263.2 million	£155 million (18%)	£164 million
2005–2006	£5.7 billion	£251.8 million	£215.1 million	£120.3 million (15%)	£94.8 million
2004–2005	£5.3 billion	£215.3 million	£175.9 million	£105.8 million (14%)	£70.1 million
2003–2004	£5.0 billion	£173.5 million	£148.8 million	£87.3 million (12%)	£61.5 million
2002–2003	£4.7 billion	£145.5 million	£108.6 million	£67.6 million (10%)	£41.0 million
2001–2002	£4.4 billion	£141.5 million	£103.3 million	£57.3 million (9%)	£46.0 million
2000–2001	£4.1 billion	£149.5 million	£120.4 million	£58.1 million (10%)	£62.3 million
1999–2000	£3.7 billion	£194.7 million	£161.0 million	£77.8 million (15%)	£83.2 million

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. This is an attractive facet of the company, which has a reputation for looking after its staff (including paid secondments whilst partners conduct charity work; subsidised canteens and staff excursions amongst other benefits).

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

Financial section of John Lewis' website

Department stores

The John Lewis department store logo

Main article: John Lewis (department store)

As of 2011 the John Lewis division operates 28 full-line department stores, 4 John Lewis at Home 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.^[13]

As well as the John Lewis department stores the partnership operates five Waitrose Food & Home stores combining the group's Waitrose supermarkets with some of the John Lewis division's non-food ranges.

Newer John Lewis at home stores are opening to cater for areas which have no local John Lewis department near them. They are around a third of a size of a normal department store. The first store opened in Poole in October 2009. This year Croydon will open at the end of August, along with Tunbridge Wells and Swindon later in the year. This type of store contains both Home and Electrical departments with services such as a cafe and 'Click and Collect' also available.

The Peter Jones department store logo

Main article: Peter Jones (department store)

Peter Jones is one of the largest and best known department stores in central London, England. It is a store of the John Lewis Partnership and located on Sloane Square, at the junction of King's Road and Sloane Street, in the fashionable Chelsea district, close to the elite districts of Belgravia and Knightsbridge. Peter Jones was founded as an independent store but was taken over in the 1920s to form part of the John Lewis Partnership.

Supermarkets

The Waitrose logo

Main article: Waitrose

The John Lewis Partnership also owns Waitrose, an upmarket supermarket chain which has 259 branches (2011) 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. In January 2009, Waitrose announced the purchase of an additional 13 stores from Somerfield. Waitrose also does online shopping and was the first to offer a free delivery service. This is in addition to Ocado.

The Ocado logo

Main article: Ocado

Ocado is an online supermarket which sells Waitrose own brand products. It delivers in vans which have pictures of fruit and vegetables. The John Lewis Partnership pension fund previously owned 29% of Ocado^[14], but fully divested itself of its share ownership in February 2011.^[15]

Direct services

On 3 October 2006, the Partnership launched a direct services company named Greenbee. Greenbee provided travel, leisure and financial services.^[16][17] Initially, the company offered home, travel, wedding and events insurance as well as a travel and tickets service.^[17] It subsequently expanded to offer other services including car^[18] and pet insurance,^[19] insurance for second homes^[20] and broadband Internet access.^[21] In late 2010 Greenbee was absorbed into the John Lewis brand and insurance services are now offered under the John Lewis Insurance brand. Broadband and telephone services will continue to be provided by John Lewis.^[22]

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^[23] — 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.^[24] 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 two further textile production businesses: Carlisle-based printer Stead McAlpin (founded c. 1875, 200 workers) and Haslingden, Lancashire-based weaver J H Birtwistle.^[25][26] In spite of capital investment and improvements in efficiency, neither had been profitable for almost 10 years. Apex Textiles, whose managing director is Jim Kidd, was formed to buy the businesses. The partnership announced its intention to retain both businesses as key suppliers once they were under new ownership and to agree ex gratia payments to partners employed at the affected sites.

Notes

1. ^ Details of John Lewis' incorporation and current head office; from Companies House records.
2. ^ "John Lewis Partnership — Our founder — the John Spedan Lewis story". John Lewis Partnership. http://www.johnlewispartnership.co.uk/Display.aspx?&MasterId=947efa13-8aac-47d9-b30a-e59a7bbca56c&NavigationId=548. Retrieved 2008-05-28. 
3. ^ "The Sunday Times Top Track 100". FAST TRACK in association with The Sunday Times. http://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/Services/CF/UK_CF_2010TopTrack100supplement.pdf. Retrieved 2011-02-16. 
4. ^ "The Sunday Times Top Track 100". FAST TRACK in association with The Sunday Times. http://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/Services/CF/UK_CF_2010TopTrack100supplement.pdf. Retrieved 2011-02-16. 
5. ^ "Les heureux salariés du distributeur anglais John Lewis" (in French). http://archives.lesechos.fr/archives/2011/lesechos.fr/03/10/0201211642896.htm. 
6. ^ "Top 10 for 2010". FAST TRACK in association with The Sunday Times. http://www.fasttrack.co.uk/fasttrack/leagues/top100supplement.html. Retrieved 2011-02-16. 
7. ^ "John Lewis beats M&S as UK's best high-street website". Marketing Magazine. http://www.marketingmagazine.co.uk/news/1035596/John-Lewis-beats-M-S-UKs-best-high-street-website/. Retrieved 2011-02-16. 
8. ^ Anne Pimlott Baker, ‘Bainbridge, Emerson Muschamp (1817–1892)’, Oxford Dictionary of National Biography, Oxford University Press, 2004; online edn, Jan 2010 accessed 29 April 2011
9. ^ Brignall, Miles. "John Lewis: Never Knowingly Undersold?". The Guardian. http://www.guardian.co.uk/money/2011/feb/05/john-lewis-never-knowingly-undersold. Retrieved 7 March 2011. 
10. ^ An eye for retail, People Management magazine, 16 July 2009 A human resources view of the John Lewis Partnership
11. ^ "John Lewis rules out float". BBC News. 20 September 1999. http://news.bbc.co.uk/1/hi/business/the_company_file/451620.stm. Retrieved 6 May 2010. 
12. ^ Killgren, Lucy (March 11, 2009). "John Lewis cuts bonuses as profits plunge". Financial Times. http://www.ft.com/cms/s/0/1523291a-0e23-11de-b099-0000779fd2ac.html. 
13. ^ http://www.johnlewispartnership.co.uk/TemplatePage.aspx?PageType=CAT&PageID=75
14. ^ Online grocer Ocado may float next year.Accessed: 2009-07-05
15. ^ Online Ocado shares hit after John Lewis sells stake. Accessed: 2011-10-08
16. ^ "John Lewis starts travel service". BBC News. 2006-10-03. http://news.bbc.co.uk/1/hi/business/5402088.stm. Retrieved 2009-08-23. 
17. ^ ^{a b} Budworth, David (2006-10-08). "Insurance is in stock at John Lewis". The Sunday Times (London). http://www.timesonline.co.uk/tol/money/insurance/article664362.ece. Retrieved 2009-08-23. 
18. ^ Kilner, Richard (2008-07-30). "Greenbee enters car insurance market". Insurance Daily. http://www.insurancedaily.co.uk/2008/07/30/greenbee-enters-car-insurance-market/. Retrieved 2009-08-23. 
19. ^ "Molly-coddled? The human dogs". Daily Mail. 2009-07-28. http://www.dailymail.co.uk/news/article-1202640/Molly-coddled-The-human-dogs.html. Retrieved 2009-08-23. 
20. ^ Gallagher, Rosemary (2007-10-27). "Greenbee.com targets niche home insurance market". The Scotsman. http://money.scotsman.com/scotsman/articles/articledisplay.jsp?section=Insurance&article_id=8206460. Retrieved 2009-08-23. 
21. ^ "Greenbee: Products and services". John Lewis Partnership. http://www.johnlewispartnership.co.uk/Display.aspx?MasterId=3121d339-1d4c-4e8f-8d18-6f7c00a941ba&NavigationId=1612. Retrieved 2009-08-23. 
22. ^ Farey-Jones, Daniel (17 September 2010). "John Lewis drops Greenbee brand and focuses on insurance". Marketing. http://www.marketingmagazine.co.uk/news/1029176/John-Lewis-drops-Greenbee-brand-focuses-insurance/. Retrieved 6 February 2011. 
23. ^ http://www.johnlewispartnership.co.uk/TemplatePage.aspx?PageType=CAT&PageID=35
24. ^ http://www.partnershipcard.co.uk/html/benefits.jsp
25. ^ John Lewis Partnership, London, 3 September 2007.Accessed: 2007-09-10]
26. ^ Stead workers stunned, Cumberland News, 6 September 2007.Accessed:2007-09-10.^{[dead link]}

References

• John Spedan Lewis 1885-1963: Remembered by Some of his Contemporaries in the Centenary Year of His Birth with the editor being Hugh Macpherson. Mainly black and white, colour plates relating to the business of the John Lewis Partnership and links with Waitrose Supermarkets. With a foreword by Peter Lewis. Includes biographies of executives, and an index. Detail from a copy of John Spedan Lewis published by John Lewis Partnership in 1985 with no ISBN.
• Julia Finch, Andy Street: Humble MD who is never knowingly underpaid (9.3.2008) The Guardian

External links

Organized labour portal

• John Lewis Partnership
• John Lewis Consumer website
• Waitrose Consumer website
• The Partnership Card
• Ocado Website
• Memory Store
• Greenbee