THE future of John Lewis and Waitrose has been thrown into chaos as a managing director was sacked and the chairman warned that staff may miss out on a bonus.
Paula Nickolds, who has been with the employee-owned retailer John Lewis since 1994, leaves just three months after the managing director of Waitrose, Rob Collins, also stepped down following a major restructuring.
John Lewis Partnership chairman Sir Charlie Mayfield is also quitting – having announced his departure in November 2018 – and will be replaced next month by outgoing Ofcom chief Sharon White.
Nickolds' departure comes as the department store revealed a 2% like-for-like sales slump in the seven weeks to January 5. She declined to comment.
She was supposed to become the new executive director of brand – overseeing both divisions of the partnership – in a newly created role which she was due to take up in February.
Mayfield said: "After some reflection on the responsibilities of her proposed new role, we have decided together that the implementation of the future partnership structure in February is the right time for her to move on and she will leave the partnership with our gratitude and best wishes for the future.
"At the full year, we expect profits in Waitrose & Partners to be broadly in line with last year. In John Lewis & Partners we will reverse the losses incurred in the first half of the year, but profits will be substantially down on last year. We therefore expect that partnership profit before exceptionals will be significantly lower than last year."
He added: "The partnership board will meet in February to decide whether it is prudent to pay a partnership bonus.
"The decision will be influenced by our level of profitability, planned investment and maintaining the strength of our balance sheet."
In March last year, the company revealed that staff bonuses for the employee-owned retailer would be just 3% of annual pay - the lowest level since 1953 – after profits fell 45.4% to just £160 million.
Gross sales at the partnership in the seven weeks to January 4 were down 1.8% compared with last year at £2.2 billion. Waitrose saw a 1.3% fall in sales, due to store closures, but was up 0.4% on a like-for-like basis.
But at John Lewis there was a 2.3% fall in sales – or 2% on a like-for-like basis – with electricals and home furnishing sales both down heavily. They fell 4% and 3.4% respectively compared with a year ago.
Mayfield added: "We saw significant variation in levels of demand, with Black Friday sales up 10.0% on the equivalent period last year, followed by more subdued demand in the subsequent weeks."
But most concerning for the employee-owned business is the collapse in profits at the partnership, with the chairman warning that "profits will be substantially down on last year".
There was some growth, with beauty sales up 4.7% and fashion up 0.1%, while at Waitrose online orders and basket sizes increased 23% in the seven days leading up to Christmas compared with last year.
However, John Lewis could only manage a 1.4% increase in online sales, meaning the group overall saw an online uptick of 16.7% in total.
John Lewis and Waitrose have had a difficult few years, with former bosses Andy Street and Mark Price leaving at similar times. Both have gone on to pursue careers in politics.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here