Yahoo Finance Coronavirus: John Lewis to close stores, cut jobs, and weigh partner bonus
John Lewis confirmed on Wednesday that it is considering permanently closing some of its stores, warning that it had “too much store space” for the way consumers will shop in the wake of the coronavirus crisis.
In a statement, the company said that the reality of the pandemic meant it was “highly unlikely” that it would reopen all of its stores.
It noted, however, that a final decision would not be made on the closures until the middle of July.
In a memo sent to the firm’s 80,000 staff, new John Lewis Partnership chairman Sharon White said that the closure of stores means that it was “likely” that there would be job cuts.
“We are in active discussions with landlords about ending some leases and renegotiating others to make the terms more flexible,” she said.
In the memo, which was first reported by the Evening Standard, White warned that John Lewis would close one of its two large Victoria offices and said it was unlikely that the firm’s partners would receive their bonus next year.
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Because John Lewis is an employee-owned business, all 80,000 permanent staff are referred to as partners.
“There is clearly a lot of uncertainty but as things stand, it is hard to see the circumstances where we will be able to pay a bonus next year,” White said.
“I know this will be a blow for partners who have made sacrifices these past months.”
Staff bonuses at John Lewis are currently set at 2%, the lowest level since 1953 — the last time it paid no bonus.
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The company warned earlier this year that it was considering axing the staff bonus. There have been just 17 years in total since the company was founded in 1919 that a bonus was not paid to partners, but most of those years fell during World War II.
White noted that government support — such as the wage-subsidy scheme and a rates holiday — had been “a big help.”
“Trade too has not been as bad as our worst-case scenario thanks to a lot of hard work from our partners. However, as our competitors reopen we expect trading to be tougher in the second half of the year,” she said.
