Body piercing, cooking lessons Jamie Oliver-style, luxury hi-tech skin treatments and preloved Prada handbags … This is John Lewis, but not as you know it, with a £6.5m revamp of its high-profile branch on London’s Oxford Street signalling its belief that department stores have a future.
After a hiatus when it sought to move away from retail and make money from other things, such as renting flats and selling home insurance, the John Lewis Partnership, which also owns Waitrose, confirmed plans to invest £800m in its namesake brand over the next four years. A large chunk of the money is to be spent on revitalising its stores.
Peter Ruis, the boss of the department store chain, said it had been honest about that fact it had not been investing enough in its stores. It planned to rectify that because it was now clear from a sales perspective that shops are “here to stay”, he said.
During the fight for survival in the pandemic, John Lewis explored turning entire floors of the Oxford Street store into offices. However, the pendulum appears to have swung the other way, and the £6.5m revamp on the country’s best-known shopping street will be used to test new ideas.
“We all came out of Covid thinking we had trained customers to shop online, and it turned out we hadn’t,” said Ruis. “There has been a philosophical reset across the whole industry as it realised customers have come rushing back to stores, with younger customers coming back the quickest.”
As part of a plan to diversify, the previous management team, led by the then chair, Sharon White, set the target of making 40% of group profits from non-retail businesses. However she confirmed earlier this year that it had now been dropped.
With shoppers keen to spend on experiences and treats, Ruis said there was “something happening on every single floor” in Oxford Street. In new spa treatment rooms, well-heeled shoppers can spend several hundred pounds on cosmetic procedures such as “microneedling” and chemical peels. Other attractions include a piercing and jewellery welding studio run by the upmarket brand Tish Lyon. The old bedding department has become a branch of Waterstones hosting talks by celebrity authors.
The Jamie Oliver cooking school will open in March and, as part of the buildup, there will be a Willy Wonka-style golden ticket competition to do a class with the TV chef. To tap into the preloved fashion boom the retailer has also teamed up with luxury fashion resale brand Sign of the Times to sell designer handbags from the likes of Prada and Chanel.
In another back-to-the-future step, the retailer has recently revived its “never knowingly undersold” price promise, which it ditched just two and a half years ago. It has been well received, with the price pledge believed to be behind 90,000 extra visits a day to its website.
In September, the long-serving Tesco executive Jason Tarry succeeded White as chair. He still has much work to do to revive the group’s fortunes, as while it returned to an annual profit in March, it did not pay its staff an annual bonus for the third time in four years.
With rival Marks & Spencer enjoying a purple patch, Ruis joked of a healthy rivalry akin to the showdown between Oasis and Blur at the height of Britpop. Shoppers had loved its collaboration with British label A.W.A.K.E. Mode, which followed M&S’s fast-selling tie-up with Bella Freud, he said. “It has been a bit of Blur v Oasis in terms of M&S and us … we are having fun.”
Even with tax rises predicted in next week’s budget, Ruis said it was not all doom and gloom for shoppers, with sales at its Christmas shop up 18% on the year and Waitrose’s appointment bookings for online deliveries “way ahead” of last year.
“An early Christmas gives us a sense that customers are a lot more optimistic than when inflation was sitting at 10% last year,” he said, adding that the expectation of another interest rate cut next month, and a sense that the country was in a better place economically than a year ago, was “showing through in the customer behaviour”.