John Lewis to combine department stores and Waitrose under same management team, shedding around a third of head office management roles.
John Lewis has announced that the boss of its Waitrose chain will leave the company, as the retailer plans to bring its department stores and supermarket business under the same management team, with 75 job losses.
The roles of divisional managing directors for Waitrose and John Lewis will be abolished. Rob Collins, managing director of the Waitrose business, will leave the group in January next year, and separate management teams for the two divisions will be scrapped. The overhaul will see around 75 of the company’s 225 senior management head office roles vanish, as part of a strategy designed to save around £100m. John Lewis MD Paula Nickolds will remain with the group, taking on the newly created role of executive director for brand.
Sir Charlie Mayfield, outgoing chairman of John Lewis, said: “The lesson of the last two years is that we need more innovation, faster decision making and bolder steps to align our operating model with our strategy. Although there will be little or no disruption to our shops or websites in the near term, there will be considerable change in many other areas of the partnership as we bring the two businesses much closer together. These are necessary, and these changes will be difficult for some of our partners, and we will implement as carefully and sensitively as we can.”
The move reflects the significant overlap between the two brands’ customers; among the group’s highest-spending customers, eight out of 10 shop at both Waitrose and John Lewis. The group recently started trials of a loyalty card scheme common to both brands. As well as cutting operating costs, the move is expected to speed up decision making in the face of weak consumer spending and structural changes in retail. There are also opportunities to make internal and customer service systems more efficient by integrating IT and supply chains.
The changes are due to come into effect in early February 2020, shortly after Sir Charlie’s replacement, Sharon White, takes over as chairman of the partnership.
Sir Charlie added, “We are confident, as a board, that when the programme is complete, the partnership will be better positioned to break out from the cycle of declining returns that are affecting most established retailers. We will be a more modern and more unified business with a leadership team and cost structure that will enable the business to thrive in the long-term.”