Reaction: John Lewis staff could miss out on bonus as boss leaves in shock departure
John Lewis was in turmoil today as the managing director of the department store giant departed and the chairman warned that staff may miss out on a bonus.
Paula Nickolds, who has been with the staff-owned retailer since 1994, leaves just three months after the managing director of supermarket division Waitrose also stepped down following a major restructuring.
Her departure comes as the department store revealed a 2 per cent like-for-like sales slide in the seven weeks to 5 January.
Nickolds was supposed to become the new executive director of brand - overseeing both divisions of the partnership - in a newly created role which she was due to take up in February.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, who is stepping down in February, said: "After some reflection on the responsibilities of her proposed new role, we have decided together that the implementation of the future partnership structure in February is the right time for her to move on and she will leave the partnership with our gratitude and best wishes for the future.
"At the full year, we expect profits in Waitrose & Partners to be broadly in line with last year. In John Lewis & Partners we will reverse the losses incurred in the first half of the year, but profits will be substantially down on last year. We therefore expect that partnership profit before exceptionals will be significantly lower than last year."
He added: "The partnership board will meet in February to decide whether it is prudent to pay a partnership bonus. The decision will be influenced by our level of profitability, planned investment and maintaining the strength of our balance sheet."
Richard Lim, chief executive of Retail Economics, said: "These figures confirm that trading is tough and news that the MD is stepping down could signal just how uncomfortable life is getting.
"The later timing of Black Friday may ultimately have been the destructive force at play. Consumers appear to have pulled forward gift purchases to take advantage of deep discounts at the expense of Christmas trading.
"What’s more, in this hyper-competitive industry, their price matching promise is likely to have eroded margins further against the backdrop of rising operating costs.
"Waitrose performed better but continues to undergo a transformation in the business. The shining light was an impressive performance in their online proposition."
Analysts at brokerage Shore Capital noted: "With a new management structure combining roles across both businesses to bed in and losing a third of the senior managers across both businesses during peak trading, this Christmas trading statement highlights the extend of the change that is needed, particularly from the department store format.
"The competitor intensity with Mike Ashley’s House of Fraser starting to get his act together in recent months continues to pose challenges. In our view, John Lewis department stores should be performing better in trading terms given that its two principal competitors have struggled in recent years and will both downsize their store portfolios."