John Lewis stands on the brink of an irreversible slide into administration. Within 2 years they may follow BHS off the high street and into oblivion.
John Lewis doesn’t appear to be averse to these pressures either. Profits have taken a nose dive, and the future is looking extremely bleak for the much loved department store. In fact, only eight months ago the company’s profits slumped 99 per cent – and just two months ago, bonuses given to staff were the lowest they’d be in over sixty years.
With the above in mind, it’s a miracle that it has made it this far into 2019. But just how long can the company keep going for? We fear the worst.
John Lewis has done remarkably well to still be hanging on in there, as other similar department stores such as BHS and House of Fraser have either folded or entered administration.
John Lewis hasn’t really put a foot wrong it terms of business management. The majority of its demise, however, can be attributed simply to change – a change in people’s shopping behaviours, and a general change and shift in people’s disposable income.
Naturally, one of the biggest hits to the store giant has to be the internet.
John Lewis itself has such a large presence online. But, despite them having this presence, it doesn’t take away from the fact that they still have stores and staff to protect. This means that whilst they are cashing in on the lucrative online market, they, at the same time, cannot do anything that would hinder or take away from their stores. Online fashion and homeware retailers who only operate online do not have to take this into account, thus meaning that they can advertise products cheaper as they don’t have the same outgoings and overheads.
One of the reasons John Lewis has managed such admirable longevity in this hostile environment is that products are high quality. People with money to splurge bought their goods from here as it signalled quality and class – and it is this reputation that has kept them in the game for so long.
Even though their fine reputation still stands, however, John Lewis is finally losing its grip on the consumer. The main reason for this is that people haven’t the same amount of disposable cash that they used to have. People have far less money to spend on non-essential items – which is predominantly what the store sells. The company, like others, has also had to battle a weak pound.
We hate to say it, but we cannot foresee this high street favourite getting much further than December of this year. Christmas 2019 will be a big test for them – and that’s if they make it that far.