This week Forum members were treated to a fascinating talk about department store chain John Lewis, given by the young but impressive Tom Lomas, who is currently Department Manager of Fashion in the Exeter store. Tom's talk took us at speed through the 154 year history of John Lewis, demonstrating how it differs from other retail entities, and giving us some pointers as to how it may evolve in the future.
A number of stand-out points emerged. There was an audible gasp of shock when we were told that John Lewis the founder once spent 3 months in prison for harsh treatment of his employees. In fact it was his son, John Spedan Lewis, who gradually introduced the changes which have made the business a good place in which to be an employee, and which have resulted today in John Lewis being owned by its partners - its staff.
Because of conflict with his father over the gradual introduction of employee-friendly measures in the John Lewis business, in 1914 John Spedan Lewis relinquished any role in the John Lewis Oxford Street store in exchange for total control over the Peter Jones store, which had been taken over in 1905. Here, where he soon improved employees' working conditions, he was able to demonstrate the success of his ideas within 5 years by turning an annual deficit of £8000 into a profit of £20000.
After the death of his father, in 1929 John Spedan Lewis instigated the creation of the first Trust Settlement, which made the John Lewis Partnership a legal entity. Thereafter all the business' profits were made available for distribution to partners. Then, in 1950, the second Trust Settlement was created. This resulted in the transfer of John Spedan Lewis' remaining shares in the Partnership, and ultimate control, to the Trustees and effectively transferred ownership to the people employed in the company.
Meanwhile, in 1937, the Partnership took over Waitrose, then a chain of 10 grocery shops based around Acton. This business was founded in 1904 by Mr Waite, Mr Rose and Mr Taylor. In 1908, two years after Mr Taylor had left the business, the name "Waitrose", derived from the remaining founders' names, was adopted. That business has of course expanded enormously over the years, and although small compared with some of the other supermarket chains, it has retained a loyal customer base in tune with its quality ethos.
By this stage in the talk it had become clear that the structure of the partnership is very different from that usually adopted by large retail companies, most of which have stock market listings with shares being bought and sold on the stock exchange. This means it is perhaps slower to react to changes in the marketplace but perhaps moves with greater effectiveness when it does change track by virtue of carrying the partners along with the course of action that has emerged through internal consultations.
As for the future, John Lewis will not be opening any more new stores after Cheltenham later this year - the move to online is evidently so significant - 65% of John Lewis' Christmas profit came though their website.
A number of stand-out points emerged. There was an audible gasp of shock when we were told that John Lewis the founder once spent 3 months in prison for harsh treatment of his employees. In fact it was his son, John Spedan Lewis, who gradually introduced the changes which have made the business a good place in which to be an employee, and which have resulted today in John Lewis being owned by its partners - its staff.
Because of conflict with his father over the gradual introduction of employee-friendly measures in the John Lewis business, in 1914 John Spedan Lewis relinquished any role in the John Lewis Oxford Street store in exchange for total control over the Peter Jones store, which had been taken over in 1905. Here, where he soon improved employees' working conditions, he was able to demonstrate the success of his ideas within 5 years by turning an annual deficit of £8000 into a profit of £20000.
After the death of his father, in 1929 John Spedan Lewis instigated the creation of the first Trust Settlement, which made the John Lewis Partnership a legal entity. Thereafter all the business' profits were made available for distribution to partners. Then, in 1950, the second Trust Settlement was created. This resulted in the transfer of John Spedan Lewis' remaining shares in the Partnership, and ultimate control, to the Trustees and effectively transferred ownership to the people employed in the company.
Meanwhile, in 1937, the Partnership took over Waitrose, then a chain of 10 grocery shops based around Acton. This business was founded in 1904 by Mr Waite, Mr Rose and Mr Taylor. In 1908, two years after Mr Taylor had left the business, the name "Waitrose", derived from the remaining founders' names, was adopted. That business has of course expanded enormously over the years, and although small compared with some of the other supermarket chains, it has retained a loyal customer base in tune with its quality ethos.
By this stage in the talk it had become clear that the structure of the partnership is very different from that usually adopted by large retail companies, most of which have stock market listings with shares being bought and sold on the stock exchange. This means it is perhaps slower to react to changes in the marketplace but perhaps moves with greater effectiveness when it does change track by virtue of carrying the partners along with the course of action that has emerged through internal consultations.
As for the future, John Lewis will not be opening any more new stores after Cheltenham later this year - the move to online is evidently so significant - 65% of John Lewis' Christmas profit came though their website.
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