Pictured: Andy Street, John Lewis and Gary Davie,
Shakespeares
Andy Street, managing director at John Lewis, has been talking
to Midlands business leaders about the benefits of employee
ownership during an economic downturn.
Speaking at a business event hosted by Shakespeares law firm at
Opus Restaurant in Birmingham, Andy Street explained how John
Lewis's business model, in which employees are referred to as
'Partners' and share financially in the success of the business,
has helped the retailer face up to some harsh challenges during
recent economic recessions. He said:
"In 2008, with the demise of Lehman Brothers and UK banks in
serious financial distress, it was clear that the economic climate
had shifted dramatically. With trading down by between 14 - 16%, we
needed to act. After consulting my senior managers at the business,
we decided collectively that we would take a no compromise approach
on the things that count to our customers - quality, price and
service.
"We had to take some tough decisions at this time, but Partners
recognised that while this might affect our profitability in the
short-term, it was the right decision to protect our business for
the future."
After a strong performance in 2010, largely as a result of its
'no compromise' strategy, by March 2011 the business was able to
reward its Partners with a healthy bonus. At the same time, John
Lewis was investing in the future and had set its sights on
becoming the best multi-channel retailer in the UK.
Referring to the value of employee ownership during economic
downturns, Mr Street said:
"Employee ownership is not a softer model than other business
models. It can't afford to be. The ultimate aim of the John Lewis
Partnership is the happiness of our Partners in a successful
business, and to maintain that success we must continue to
innovate.
"Our investment in our multi-channel offer has been key to this.
As well as our shops, customers can buy from their home computer,
their mobile phone or in-store kiosks, and they can collect their
order the next day from 120 collection points at John Lewis and
Waitrose shops across the UK. As our customers' shopping habits
change, we have to ensure we keep pace with that change."
He also commented that an employee ownership business model was
helpful when it came to raising finance by going to the bond
markets. The retailer has been able to raise finance on favourable
terms, largely because investors were confident in its business
model.
Mr Street concluded:
"It is part of our aim to spread the word about the benefits of
employee ownership and promote it as a business model with a proven
track record of success, whatever the economic conditions."