Retail

John Lewis staff rebuke Sharon White over losses but back her to continue


The boss of John Lewis pledged the group will always remain employee-owned, “no ifs, no buts”, after staff backed her to continue as chair but expressed their dismay at the retailer’s poor performance.

Dame Sharon White had faced controversy after reports she was considering selling a stake in the John Lewis Partnership, which also owns Waitrose, to an outside investor in an attempt to raise £2bn. On Wednesday, her leadership was tested in a confidence vote at a twice-yearly meeting of the retailer’s 60-strong council, which is elected by employees to represent them.

Announcing the result of votes on past performance and White’s mandate, Chris Earnshaw, the president of the partnership council, said: “The council voted in support of the chairman to progress the partnership in relation to its purpose, principles and rules. The council did not support last year’s performance, in which we reported a full-year loss and no partner bonus.”

The department store and Waitrose supermarket owner reported a £234m loss in the year to the end of January, despite £12bn of sales, forcing it to scrap its staff bonus for only the second time since 1953.

The votes at the group, which has been owned by its workers since the 1920s, are symbolic rather than binding. However, they can be influential, as the council has the power to oust the chair of the partnership at any time if members see fit.

Speaking before the voting on Wednesday, White told the council: “I want to be absolutely categorical. The John Lewis Partnership will always be an employee-owned business, no ifs, no buts. There is absolutely no question of demutualisation.

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“Our model is the reason I joined the partnership as I believe in a form of kinder capitalism in the 21st century, which demonstrates our ability to combine commercial excellence with social purpose. It’s what makes us special.”

White said the company would consider external investment if at any point the partnership was “unable to fund all our plan through our own means”. However, this would only be done in a way that was consistent, with all partners fairly sharing in the benefits of the business as promised in the original staff ownership deal, she added. That deal dates back to the 1920s and 1950s.

The council, a governing body made up of shop-floor staff elected by the company’s workers, gathered at Odney Club, a partnership-owned holiday retreat in Berkshire, for what it called a “holding to account session”, which is part of the group’s democratic process.

After the presentation by White and a debate, the council held two votes – one on whether it had confidence in the progress of the partnership under the chair’s leadership over the past year, and the other on whether it could support her to take the business forward.

Members were able to choose from options from “strongly agree” to “strongly disagree” and opted to back White, a former top civil servant, to continue but to rebuke her over the past year’s performance.

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Before the vote, White expressed “profound regret” that the group had been unable to pay a bonus to staff for only the second time since 1953. She said the ultimate responsibility for the group’s poor performance fell to her and that the board had decided against “short-term fixes” to support profit in favour of long-term investment in its two brands.

White admitted the staff pay situation had “been unbelievably tough” and continued to be so, and pledged an increase in basic pay rates was an “absolute priority, even ahead of bonuses”, when profits returned.

White said the group was now “on a secure and clear path to profitability”.



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