According to recent reports, John Lewis is contemplating the closure of several regional department stores due to the ongoing rise in online shopping. Although the company has not officially confirmed these rumors, speculation has been circulating that as many as eight out of the remaining 42 department stores might be in jeopardy of shutting down. The Sunday Times has indicated that the exact number of closures is still up in the air and is subject to negotiations with landlords.
It has been suggested that the older and larger stores are the most at risk, with locations such as Liverpool, Cambridge, Southampton, Norwich, Nottingham, and Newcastle potentially facing closure. The company may make an official announcement as early as next month regarding this plan. With the lockdown measures in place, the uncertainty looms over whether these stores will ever reopen, or if they do, it could be for a limited time to facilitate a clearance sale.
Last year, John Lewis made the difficult decision to close several stores, resulting in the loss of around 1,300 jobs and an additional 1,500 head office roles. The closure of eight more stores could put a similar number of jobs at risk. The company had been on an expansion spree for its John Lewis chain in the past years, but it seems that the aggressive push in physical stores may not have been the wisest move, especially in light of the current circumstances.
Before the pandemic, online sales at John Lewis made up 40% of their total retail sales. Now, this figure has surged to around 60%, and there are predictions that it could climb even higher to 70% in the future. A review conducted before the pandemic had already suggested that up to 20 of their locations may not be sustainable in the evolving retail environment.
This potential new wave of closures indicates a strategic shift towards a digital-first approach for John Lewis as they strive to navigate the ever-changing retail landscape and shifting consumer behaviors. It will be interesting to observe how the company will adapt and transform in response to these challenges.
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