Two familiar high street names, John Lewis and TM Lewin, are set to close stores and restructure around online, while M&Co looks for a buy-out, as the fall out of COVID-19 start accelerates the digital shift in retail operations.
Today John Lewis chairman Sharon White told its 80,000 partners at the company – including those at Waitrose – that their annual bonus will be scrapped this year and that hundreds of jobs are to go as it closes a number of its high street stores.
The news comes after shirt maker TM Lewin announced yesterday that it was closing all 66 of its high street outlets, with the loss of some 600 jobs.
Both retailers have pledged to devote more effort to their online sales as they attempt to keep their brands going.
Meanwhile, M&Co, with a revenue short-fall of £50 million, is looking for a buyer or pre-pack deal to try and save its 262 stores and nearly 3000 jobs.
John Lewis woes
In a letter to staff sent out last night, John Lewis’ White told staff that the retailer currently has “too much space” and that “the difficult reality is that we have too much store space for the way people want to shop now”. The closures are also reported to include the retailer’s icon head office at Partnership House in London’s Victoria.
According to the London Evening Standard, the letter goes on: “”As difficult as it is, we now know that it is highly unlikely that we will reopen all our John Lewis stores. Regrettably, it is likely that there will implications for some Partners’ jobs. We are in active discussions with landlords about ending some leases and renegotiating others to make the terms more flexible. We are rethinking our head office space to cement more flexible working that has become a feature of the crisis, and will be relinquishing Partnership House in London”.
At the start of the COVID-19 pandemic and the associated lockdown, John Lewis warned that, post crisis, not all of its 50 stores would re-open. As restrictions have eased, the retailer has opened 20 stores, with 10 more planned to re-open on 13 July.
Last week John Lewis – an elite retailer in the RXUK Top 500 – committed to making its retail premises more relevant, appointing Pippa Wicks from the Co-op Group as executive director for John Lewis, a job in which the key challenge will be to ensure that the department store stays relevant as shoppers move further online following the Covid-19 pandemic.
Her remit has been seen to be build on the strategy of in-store experiences, but in the post-COVID world. With many of John Lewis’ customer experiences moving online during lockdown, it is likely that strategy will now look at how to extend that, as the retailer looks to stay relevant in a socially-distanced world.
TM Lewin folds
At the opposite end of the retail scale, shirt maker TM Lewin – a top 250 retailer in the RXUK Top 500 – has also announced that it is withdrawing from the high street, closing all 66 of its stores and moving operations online.
In a statement, Resolve, which has been hired to restructure the retailer, said: “This acquisition secured the future of the brand at a time of unprecedented uncertainty within the retail sector. After considerable review, and due to the many issues currently being experienced by high street retailers, it has been determined that the future of the TM Lewin brand will be online-only.”
The shirt makers assets have been sold to Torque Brands – and investment company set up by Simba Sleep co-founder James Cox and backed by Allan Leighton, former Asda CEO and Paul Taylor, who previously ran Harrods – in a pre-pack deal, which doesn’t include the retailer’s stores.
TM Lewin will be added to Torque’s growing stable of failing retail brands the company is looking to purchase and roll out globally as online-only retailers. Torque plans to take brands that have cache, but which are financially too insecure to survive the COVID-19 crash, and run them more economically by using the same IT, manufacturing and distribution systems to reap economies of scale.
A spokesman for Torque says: “The decision to significantly reduce the scale of the business in order to preserve its future will regrettably result in job losses as a direct result of the closing of the store network as we right-size the business.”
Currently 650 of TM Lewin’s 700 staff are on the government-funded furlough. It is thought some 600 will lose their jobs.
M&Co to go?
Scottish budget fashion retailer M&Co – a Top 150 retailer in the RXUK Top 500 – which employs 2700 people across the UK, is looking for a buyer, as the family-owned business sees a £50 million shortfall in revenue from the pandemic.
Sources working with accountancy firm Deloitte – which has been hired by the company to explore its options – say the retailer is considering a sale, partial sale or pre-pack administration.
The company currently has 262 stores, all of which have reopened post lockdown.
Other retail closure and job losses
The fall out from COVID-19 has been felt elsewhere in the retail sector this week, with further closures and job losses hitting a wide range of businesses.
At the time of writing, another 10,000 or so jobs have been lost at a range of other retailers. In the past 48 hours, the following have been announced:
• 5,000 staff from Upper Crust owner SSP Group
• Some 700 jobs from Harrods
• Around 500 office staff from Topshop’s owner Arcadia Group
• Bensons for Beds is planning redundancies.