Thu, 09 Jul 2020 | BUSINESS NEWS
Department store chain John Lewis has said that eight of its stores will permanently close after the coronavirus pandemic accelerated the company’s shift from in-store to online retail. The company added that the stores in question had been identified as struggling prior to the pandemic
The stores to close are full-size department outlets in Birmingham and Watford, travel hub stores at Heathrow Airport and St Pancras Station and four At Home shops in Croydon, Newbury, Swindon and Tamworth.
Around 1,300 staff members at the employee-owned chain will now enter into consultations over potential redundancies. John Lewis has pledged to attempt to offer alternative roles within the business to staff made redundant.
Sharon White, John Lewis Partnership chairman, said: "Closing a shop is always incredibly difficult and today's announcement will come as very sad news to customers and partners.”
"However, we believe closures are necessary to help us secure the sustainability of the Partnership - and continue to meet the needs of our customers however and wherever they want to shop. Redundancies are always an absolute last resort and we will do everything we can to keep as many Partners as possible within our business."
Touching on the increasing importance of online retail, the company said that, previously, 40 per cent of its sales were made online but that this could rise to 60 to 70 per cent of total sales for 2020 and 2021. However, this increase in online sales is not enough to make up for store closures, with the balance of purchases tilted towards smaller items.
The company had previously said that not all of its 50 stores would reopen following lockdown. Alongside the announcement of the eight closures, however, John Lewis has set out a timetable for reopening some stores. Outlets in Aberdeen, Ashford, Brent Cross, Chichester, Oxford, Peterborough, Reading, Sheffield, Swindon and White City Westfield are set to open on July 30.
A historic and prominent retailer in the UK, John Lewis is sometimes seen as a bellweather for the wider performance of the British high street. The store closures serve to illustrate the problems afflicting high street retailers and department stores, such as declining footfall and high rents.
In this Insight piece published towards the outset of the UK’s lockdown, BSR identified how the pandemic could speed up the shift from brick and mortar to online retail.
While in this recent Insight, we forecast that changing retail trends in the wake of coronavirus could see online retail emerge as a strong M&A performer after the pandemic.
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