John Lewis: can kinder capitalism compete in ruthless retail? | FT Film

The UK's much-loved John Lewis department store is a bellwether for Middle England. Its partnership model means the store is owned by its staff. But can this kind of 'caring capitalism' survive in a world of ruthless online retail?

#johnlewis #retailindustry #capitalism #capitalinvestment #retail #retailstrategy

01:43 - Challenges for John Lewis
03:38 - A radical model of partnership
06:56 - Stores boom
10:38 - Profits warning
13:12 - Stores closed
16:42 - 'Never knowingly undersold'
18:41 - Funding crisis
22:50 - Battle with Marks & Spencer
28:20 - Can the Partnership survive?

[NicolaMulholland]

They need to advertise that they are employee owned and are trying to operate a fairer commercial model. I had no idea, i would 100% choose them over M&S now i know!!!

[sander]

Reducing income inequality isn't only kinder, it's more prosperous as well. It reduces crime, healthcare expenditures etc

[immortallvulture]

John Lewis isn’t failing because it’s too ‘nice’ or too good to its employees. For years it has failed to invest in its stores and made a lot of very poor decisions about how it runs. John Lewis stores today are cluttered, dirty and dated and employee perks have been cut back massively and their lack of enthusiasm shows.

I don’t know if it’s the CEO or some other executive responsible or just mass complacency but John Lewis Is the author of its own misfortune.

[rklmbd]

Someone mentioned there needed to be "more theatre" for people to come back to brick and mortar. It reminded me that is exactly what the big department stores offered when they began. The theatre and excitement of electric lights and escalators and moving displays and the almost bewildering arrays of choice. I don't believe online will ever kill the physical retail experience. I think people need to see and touch and ask questions. We threw the baby out with the bathwater a bit on that one. Online will be far bigger of course but there will always be space for physical. All they need to bring back is the sense of occasion.

[DAZZER]

I have worked for JLP, as well as many other companies. From my experience working there, I honestly don't think they treat their employees any better or worse than any other other employer. Also, with regards to the co-ownership model, it didn't really feel like it meant anything, rather than owning shares in the business, the company pays you an annual bonus (dependent on performance), but many other (non employee owned) businesses do the same. All that said, I do agree that Waitrose and John Lewis are among some of the best places to shop.

[DavidLee-cwci]

I have had nothing but great experience with John Lewis customer service. They sent people round to sort out a problem with my sofa twice and just straight up replaced it when it couldn't be fixed. No arguments whatsoever. That's why you pay the premium.

[Andrew-rcvh]

Huawei use the same model. If you work for the firm you can hold shares and if you leave you have to sell the shares. The firm is 100% employee-owned, and interestingly the government at the time criticised it for being "too capitalist". Later on the firm made so much money and paid so much tax that the government changed its mind and thought, wow this is great, and chances are the ways of the firm influenced government thinking rather than the other way around.

John Lewis' model is fine, but it is in a difficult sector. People shop online now and so the grand department store is a thing of the past. It's still living in the 1950s.

[lunaskye]

I would say that an issue JL is facing is there isn’t much appeal to younger shoppers. This was something I noticed Debenhams had an issue with before the buyout. M&S actually has items I’d like to buy as an under 30. I think if the range of products were improved and the stores modernised, then sales could potentially improve. I also think the flagship store in grand central may not have been the best location. In grand central, people are focused on getting their trains or getting food to go. There are smaller stores owned by well known brands but no where near as large as JL. I think if they were located in the bill ring where the pool of shoppers is far greater, the results may have been better. I do hope they return to Birmingham in the future, albeit with improvement in approach.

[colinmarry]

Expected to see more data driven answers from FT. For example would have liked to see productivity per employee or at least sick leave or staff turnover data in comparison to the UK or retail and grocery averages.

[NXNX]

This has to be the mandatory model for every single business

[Souchirouu]

As long as the customers are not considered the main investors of the company capitalism will not be able to compete with models that do not have to squeeze max profit out of each and every little step. This is true for governments as well, as long as the tax payer is not considered the main investor in the nation then they will lose as well.

[os]

Employee owned model is fantastic aside from one issue - despite the fact you should be able to raise funds from the 'owners' this of course isn't possible. great film FT

[Endonae]

As an American, I had never heard of this company. Based solely on the information provided here, it seems pretty obvious that the chairwoman they hired seemed to be a terrible decision. She had no experience in that industry or with that business model. Rather than trying to fit into the mold of the company she was leading, she tried to remold it into something she knew, to something that was completely antithetical.

We can also talk about standards here. Within the past 2 decades. John Lewis endured the 2008 financial crisis, a global pandemic, Brexit, the rise of broadband internet and ecommerce along with the first generation born into it, and fierce competition in a low margin industry. It is completely absurd to believe that such a company should remain profitable year over year throughout all that. It's far more important that they weather the storm and have some savings to fall back into instead of relying on government handouts.

Despite this, you talked about the company condescendingly and defended a bad executive because the owners refused to engage in the practice of wealth extraction and consolidation to facilitate larger scale wealth extraction.

[Gooeybrowniebaby]

And the quality is decent for a reasonable price. I still have some of their bedding and cashmere jumpers that I got from my uni days nearly ten years ago. Most other brands would have fallen apart ages ago.

[tothelighthouse]

John Lewis needs to not be modest or humble about their staff-owned structure. That is a huge selling point! Consumers want their spending to matter more, we want our spending to reflect our values. I would much rather support an employee-owned business than a standard corporate entity.

[nicolasbenson]

The economy is grappling with uncertainties, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.

[rolandnelson]

Worth finding out what proportion of the population (start with a low cost curve of JL customers) know John Lewis is owned by the staff?
There maybe a gulf between that being bleeding obvious to insiders and little known to the population at large.
I’m sure if a great step more people knew the shop is owned by the staff an important marginal increase in people would shop there.
Many people aren’t dancing in the streets to shop where the profits go to a private equity firm.
Only talking about market share reprising firm 3.8% to say 4.2%

[mohddec]

Although I spent only around 3 years living in the UK between London and Aberdeen, I had no prior knowledge of John Lewis. This store stands out in terms of its ambiance, products, and most importantly, customer service. Sadly, the one in Aberdeen has been closed.

[AriannaAyers]

I loved learning about British history, and cultural points of relevance. Much love from NYC ❤

[Rumade]

Why did you mention Topshop in the same breath as Debenhams and House of Fraser? Topshop was clothing only, not a department store, and it went out of business much earlier than the other two.