John Lewis's expenses are on the rise and Ms. Sharon White's staff, which was denied an annual bonus, is rioting. : John Lewis
Shortly after Ms. Sharon White took over the John Lewis Partnership, she outlined the future of the retailer.
«I want to be able to say, 'Look, we've lost our way' and tell a story about a fundamentally different business,” she said in August 2020. «I'll feel good if we do this in five years.»
Almost three years later, it seems increasingly doubtful she'll ever get a denouement.
Losses for the employee-owned company, which includes both John Lewis and Waitrose, have risen to £234m a year. The costs are rising. Clients are unhappy. And the employees, deprived of their annual bonus, are rioting.
White's dilemma was made clear on Wednesday when the partnership's employee council pulled her out of the rut. They supported her in a vote of confidence, but made their dissatisfaction clear by voting in favor of the company's decrease in efficiency.
This made White a debased figure. Speaking at a gathering earlier that day, she attempted to rally the troops. “Life is not about waiting for the storm to pass; it's about learning to dance in the rain,» she said, quoting writer Vivian Green.
«I love that quote because it says: it's not about how you react, it's not about in the difficult moments themselves… The important thing is how you respond to these difficult moments, which are really considered a real test of your character. The partnership has shown time and time again throughout history our courage, our courage, our determination, as well as our unity of purpose to overcome any obstacle that is thrown at us.”
The meeting took place at the Odney Club, a Berkshire club hosted by John Lewis partners. One analyst suggested that the Fellowship had become «a social club with a retailer attached to it». The culture is so bureaucratic that John Lewis has been compared to the public service, which could make White the right person to do a major overhaul.
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When it was announced in 2019 that she would replace former chairman Sir Charlie Mayfield, her credentials spoke for themselves. Sharon White, 56, is optimistic about the close-knit world of business.
She stands out due to her Jamaican heritage in a predominantly white environment, and her upbeat demeanor helped her navigate the challenges of managing telecommunications and telecommunications regulator Ofcom with ease and serving as second permanent secretary in the Treasury during the financial crisis. the crisis of 2007-2008 and the EU referendum.
After graduating from Connaught Girls' School in Leytonstone, she received her first degree in economics from Fitzwilliam College, Cambridge, and has a strong work ethic and good communication skills.
“Her calling card of courtesy was “How are you?” with an optimistic accent,” says a former treasury official. «That made it hard to say, 'well, really, really bad.'
Sharon radiates positive vibes and energy.» Her husband is the high-ranking economist Sir Robert Choate, whom she married at the British Embassy in Washington.
White's combination of skills, however, was threatened when she moved — to some surprise of the big retailers — to another country. to the well-paid chairmanship of John Lewis. There is a contrast between her £1m plus income and the reduction in staff bonuses. And the phrase «not a salesperson» has always haunted her in office.
This is a far cry from the rave reviews she received as an officer in Tony Blair's Policy Division No. 10, as well as her work at the World Bank and her later career in treasury and commercial management.
White and her husband personify the default setting of a certain end of the financial elite — moving in the same circles of the liberal intelligentsia — thought that both were careful not to end up in scandals due to bias.
At Ofcom, White has been praised for his broad-mindedness in complex communication issues and for his good conduct of meetings. But she annoyed Tony Hall, then CEO of the BBC, with her tendency to load broadcasters with more social class and diversity targets and consider them «unfortunate».
“Sharon has very commendable platonic ideals about how great institutions should work,” says a senior broadcast manager. “But she doesn't always see the complexity of what's already happening, or how hard it is to change when you have to literally keep the show going. People are fed up with having their homework marked by someone who, frankly, has only ever served as an official when others have taken risks to build and innovate.”
She got a job in her new work for the John Lewis Partnership. enthusiastically, arriving with ideas on how to revitalize the brand through modernization and expansion in housing and financial products. The home range and its digital presence will also be key to the future.
However, from the very beginning there were doubts that White had the skills to pull off the turn. «I'm not a salesman and I'm not pretending,» White said. “My job is to bring the people and structures together to support and energize the partnership to make it the best it can be.”
Industry insiders have since said that inexperience has shown itself in decisions they describe as dubious at best.
According to reports, Anyday's new, less expensive range of furniture has also been derided internally by staff as «any old crap.»
In 2020, the partnership said it plans to generate 40% profits from alternative retail space by 2030, unveiling plans to enter the construction and rental market by developing real estate above or around existing stores. Additional income was to come from offering financial products.
According to reports, Anyday's new, less expensive range of furniture has also been derided internally by staff as «any old crap.» One veteran supermarket executive said the decision to go public with the housing promotion was particularly puzzling given what many of John Lewis' competitors have already done.
It was a bold move from a brand that, like M&S , knew he was struggling with a «used to be good» reputation but was not appealing to young buyers swamped with online options.
The related woes of Waitrose, part of the same retail partner, have been added to her to-do list. But to be honest, it was never clear to White that her resume was the perfect fit for a retailer weathering multiple storms.
The news that she was considering bolstering John Lewis's faltering partnership model with external funding was both familiar because of her ability to think outside the box and lack of understanding of how it will be perceived.
The financial position that White had inherited further complicated the situation. Profits and affiliate bonuses have been steadily falling for years when she came here.
White said inflationary pressures hit «like a hurricane» and left the retailer in losses of more than £230m. On Wednesday, she said the past year had been tough, especially when it came to staff pay. Over the past year, the company has waived its premiums for only the second time in its history.
The partnership also stated that they could not do as much as they had hoped. “I wish we could pay partners more this year, but that would come at the expense of jobs,” Ms. Sharon said. “As profits come back, salaries become the board's top priority, not bonuses.”
It's not just the need to pay employees more that weighs on her. John Lewis also faces a huge amount of debt that he will have to pay off in the coming years.
In December, he must repay a £50 million bank loan. It is due to pay off the £300m bond in January 2025 and then another £300m in 2034. In his latest filings, he revealed that he has a debt burden of £1.7bn, 4.1 times the value of his assets compared to 2019/20, when the multiple was 3.9.
Strong backlash forced her to publicly back down, an uncomfortable position for a leader. Now the risk is that she will have weak support for her leadership, but without the extra resources that a more mixed model would bring, the headaches of last year are unresolved and the main target of blame and frustration.
“Sharon will fight,” says an old colleague. «She's not easy to get rid of.» The battle to prove she's right for the job may be just beginning.
Anne McElvoy is Executive Editor of Politico magazine.
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