(Bloomberg) -- Sharon White’s tumultuous reign as the shortest-lived chairman of John Lewis Partnership Plc is coming to an end.
A former telecommunications regulator with no retail experience, White was seen as an unconventional choice when hired to run the employee-owned group behind John Lewis department stores and the upmarket grocer Waitrose. She’s spent much of her time in charge shutting shops and selling assets while trying to diversify away from retail.
So far there’s little sign of a turnaround. Even now as talks begin to find a replacement for the most senior woman in British retail, the company is stepping up disposals. These include 12 Waitrose stores — some of the partnership’s most prized assets — as it seeks much-needed capital for investment during the worst cost-of-living crisis Britain has seen in decades.
White is offering up retail locations in affluent parts of south England, from Richmond in Surrey to Harpenden in Hertfordshire, according to marketing material seen by Bloomberg News. They will be sold and leased back, meaning the grocery stores stay open. The other branches are in Exeter, Romsey, Wokingham, Norwich, Saxmundham, Chipping Sodbury, Welwyn Garden City, Hythe, East Cowes and Longfield.
Less than five months after suffering a show of no confidence in her leadership, White may have decided it was better to go than stay on for a second term. However, her departure leaves the partnership facing a significant challenge to find a new leader at a time when the loss-making business is struggling in most areas of operation.
“John Lewis is slowly slipping into a position of fewer and fewer options that are left on the table, but the business needs to invest heavily in their digital transformation and they need to raise capital,” said Richard Lim, chief executive officer at research consultancy Retail Economics.
“Whoever comes into this position is definitely facing an uphill battle.”
The role has rapidly become one of the toughest in the sector, balancing the competing demands of a bricks-and-mortar retailer, during a time of intense online competition and soaring costs, with the history and traditions of Britain’s best-known mutual.
As only the sixth chairman in the history of the partnership, White took the reins of a business that was already struggling to adapt to fast-changing consumer shopping habits and then was almost immediately faced with a pandemic that forced stores to shut for months.
“Not having a commercial background was a major hindrance,” said Maureen Hinton, an independent retail consultant.
A leaked proposal to raise funds through the sale of a stake in the business caused unrest among staff. In May, White faced a mixed outcome following a biannual vote on her leadership where most of the partnership council said they didn’t have confidence in the group’s performance over the previous year, even as they still backed her to continue in the role.
In June, White, who has made significant headway in cutting costs and improving staff productivity, insisted she would get the retailer back to healthy profits by 2026, as part of a five-year plan. The mission, she told members of the Employee Ownership Association, could require outside investments.
However, last month White was forced to push back her turnaround and profitability plan by two years, blaming inflation that had “hit like a hurricane” and soaring costs for the delay.
Read More: John Lewis Delays Crucial Overhaul in Blow to Chairman White
White’s replacement will have to deal with the same dilemma. “The woes of John Lewis haven’t started with Sharon White, they’ve been going back years,” said Clive Black, an analyst at Shore Capital. “The next appointee will be critical to its survival,” he added.
Waitrose and John Lewis now face the threat of a newly resurgent Marks & Spencer Group Plc — all within the limitations of a mutually owned business. While the supermarket could become a strong business with the help of a better loyalty program and targeted investment, the outlook for John Lewis is more difficult, said Nick Bubb, an independent retail consultant. The department store chain has failed to exploit the decline of rivals such as Debenhams and House of Fraser, he said, while M&S has stepped up its game.
John Lewis expanded rapidly after the turn of the century, with stores almost doubling between 2000 and 2015 and the growth financed by two public bonds of £300 million ($363 million) each, maturing in 2025 and 2034. The debt pile has increasingly looked like a burden, and in hindsight White may be exonerated for considering outside-the-box ideas for raising funds.
“If you’re losing money as a business and you find it hard to borrow, what do you do?” Bubb said, of her controversial proposal to sell off a stake in the 159-year-old retailer. “I wouldn’t blame her for exploring that.”
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