Live report from ITV News Business Editor Joel Hills
We knew this was coming but it is still a decision which will leave some communities in the UK in a state of shock.In Aberdeen, Peterborough, Sheffield, York, Ashford, Basingstoke, Chester and Tunbridge Wells, John Lewis is not only an important employer, it is part of the beating heart of their communities and a reason to visit the centre.On April 12, as non-essential shops reopen, these eight John Lewis shops will remain shuttered and something essential will have been lost.This isn’t really the pandemic, it’s the internet. Spending has been moving steadily online for years, lockdown has merely accelerated the pace of change.
Watch ITV News Business Editor Joel Hills live report:
John Lewis assumes that shopping habits have altered permanently and that, henceforth, between 60% and 70% of everything it sells will be purchased online.
The business has more space than it needs and is shrinking its property estate accordingly.
Not so long ago, John Lewis was expanding with gusto.
Under the leadership of Charlie Mayfield, between 2007 and 2017, it almost doubled in size, opening 23 shops at a time when online sales were roaring away.
The plan was to build a department store estate to rival Debenhams and House of Fraser. The adventure has turned sour, property assets became liabilities.
Today, Debenhams is gone, House of Fraser is fading and John Lewis has spent the last 12 months in retreat.The eight shop closures announced this morning are in addition to the eight announced last year. At its peak John Lewis had 50 shops, it has decided it can live with 34.Up to 1,465 staff who will lose their jobs will leave John Lewis on generous redundancy terms - any partner who has been with the company for more than two years will have £3,000 to spending on retraining.
John Lewis has the closest thing that exists in retail to a golden handshake.
Watch ITV News Business and Economics Editor Joel Hills' video report earlier this month:
There’s also £1 million set aside for communities where shops close. The sum is useful but largely symbolic.
According to Altus Group, John Lewis is vacating more than 60,000 squared metres of retail space.
In normal cycles you’d expect other thrusting retailers to fill the hole, that’s unlikely to happen this time around.Of the eight shops, the department stores in Peterborough (23,000m²) and Sheffield (20,000m²) are by far the largest.
The Queensgate store in Peterborough employs 400 staff, straddles four floors and underwent a £21m refurbishment in 2019. 500 jobs were lost in the town when Debenhams failed.Coronavirus has transferred the slow death of the high street into a short, sharp kill.
As the chairman of John Lewis, Sharon White, said recently a “national response” is required to help communities deal with the are scarring.