John Lewis Partnership

John Lewis opened a drapery shop at 132 Oxford Street, London in 1864. Born in Shepton Mallet in Somerset in 1836, he had been apprenticed at 14 to a linen draper in Wells. He came to London in 1856 and worked as a salesman for Peter Robinson, an Oxford Street draper, rising to be his silk buyer. In 1864, he turned down Robinson's offer of a partnership, and rented his own premises on the north side of Oxford Street, on part of the site now occupied by the department store which bears his name. There he sold silk and woollen cloth and haberdashery. His retailing philosophy was to buy good quality merchandise and sell it at a modest 'mark up'. Although he carried a wide range of merchandise, he was less concerned about displaying it, and never advertised. His skill lay in sourcing the goods he sold, and most mornings he would go to the City of London, accompanied by a man with a hand barrow. Later he would make trips to Paris to buy silks.[6]

Lewis spurned holidays and games and devoted himself entirely to the business, which was successful. He invested the money he made from it in residential and small retail properties, many of which he never visited. He expanded the Oxford Street business by renting neighbouring properties on Oxford Street and then along Holles Street, and gradually moved into other classes of merchandise: first the new area of ready-made women's apparel, and later children's wear and furniture. He never held 'sales', saying that he was intent on building a sound, permanent business.[7]

In 1884, aged 48, Lewis married Eliza Baker, a schoolmistress with a university education, who was 18 years his junior. They set up home in a mansion on the edge of Hampstead Heath, for which Lewis made up the name Spedan Tower after his aunt, Ann Speed,[8] and when Eliza bore a son in 1885, he was called John Spedan Lewis. A second son, Oswald Lewis, was born in 1887. After Westminster School, both sons joined Lewis in the business, and he gave each of them a quarter share of it on their twenty-first birthdays.[6]

There was constant quarrelling between Lewis and his sons. By 1909, Oswald wanted out, and Lewis senior reluctantly agreed to buy back Oswald's quarter share of the business for £50,000 (equivalent to about £4.5 million in 2010). Oswald went to read Law at Oxford, qualified as a barrister, and became a cavalry officer in 1914, but was injured and discharged in 1916, whereupon he accepted an invitation from his father to rejoin the business.[7]

Lewis had several run-ins with Lord Howard de Walden, his Oxford Street landlord, and in 1903 he spent three weeks in Brixton Prison for defying a court order obtained by de Walden. In 1911, de Walden sued him for libel; Lewis was found guilty, but the jury awarded damages of just a farthing.

In 1906, Lewis bought a controlling interest in the Sloane Square-based business Peter Jones Limited, the eponymous founder of which had died the previous year. Lewis walked from Oxford Street with the £20,000 purchase price in bank notes.[6]

In the next 13 years, the Peter Jones business was not profitable – no dividends were paid to Lewis and the external shareholders  – and in desperation, in 1914 Lewis appointed his son Spedan as chairman of Peter Jones. This gave Spedan Lewis complete control, and he decided that the underlying problem was that the staff had no incentive to do a good day's work because their own interests were not in line with those of the business. He shortened their working day and instituted a system of commission for each department, paying selling staff amounts based on turnover. He held regular meetings at which staff could air any grievances directly with him. In 1916, after a disagreement with his father, Spedan Lewis exchanged his 25 per cent interest in the Oxford Street business for Lewis's shares in Peter Jones Limited. He made improvements in staff conditions, including granting a third weeks paid holiday each year. He had hot and cold running water installed in the staff bedrooms over the shop. In 1918, he started publishing a fortnightly newspaper telling staff how the business was faring. In 1919, he instituted a staff council meeting, the first decision of which was that staff should be paid weekly instead of four-weekly. The business prospered: there was a profit of £20,000 in 1920.[7] Spedan Lewis's radical idea was that the profits generated by the business should not be paid solely to shareholders as a reward for their capital. Shareholders should receive a reasonable but limited return, and labour should be the recipient of the excess. His concept of 'fairer shares' involved sharing gain, knowledge and power. In 1920, Spedan started distributing Peter Jones preference shares to staff, who were referred to as Partners.

In contrast, John Lewis made no improvements to the conditions of his staff, and grievances built up to such an extent that in 1920, there was a five-week strike at Oxford Street. Despite support for the strikers from – among others - Queen Mary, Lewis sacked them and engaged new staff.

The early 1920s were not successful for Peter Jones. Dividends on preference shares, many of which were held by employees, were not paid. In 1924, there was a reconciliation between John Lewis and Spedan Lewis. Trade at Oxford Street had fared better, and John Lewis made a cash injection into the Sloane Square business.[7]

In 1925, Spedan Lewis devised the slogan 'never knowingly undersold' at Peter Jones. Intended mainly as a control on sourcing merchandise, it also meant that customers could shop knowing that they were not paying more at Peter Jones than they could buy identical goods for at other stores. Trade improved and profit-sharing was resumed.

By 1926, Lewis senior was 90, Spedan was impatient to gain control of John Lewis, Oxford Street so that he could implement his radical ideas there, and Oswald again wanted out. Without telling their father, Spedan took out a bank loan and bought out Oswald's inheritance. After going around the world, Oswald embarked on a political career, becoming Conservative Party MP for Colchester in 1929, and holding the seat until 1945. John Lewis died aged 92 in 1928[9], and Spedan Lewis became the sole owner of the Oxford Street business, in addition to Peter Jones. That same year, he bought the premises of T J Harries on the eastern side of Holles Street in Oxford Street, into which he expanded John Lewis.

In 1929, Spedan Lewis signed a deed of settlement, which transferred shares in John Lewis & Co. Limited and Peter Jones Limited to trustees (himself, his wife and his brother-in-law). The profits of the combined business would be distributed to its employees, either as cash or as fixed-interest stock in the new company: John Lewis Partnership Limited. In return, Spedan Lewis took £1 million of non-interest-paying loan stock, which would be repaid to him over thirty years. He would retain personal control of the business, but would not receive any interest, fees or salary, living on the repayment of the loan stock. These annual capital repayments were initially equivalent to about £1.5 million in 2010 money, but inflation reduced their value by the 1950s to the equivalent of about £0.5 million in 2010 money.

In 1933, JLP started acquiring other retail businesses, buying Jessop & Son of Nottingham, and Lance & Lance of Weston-super-Mare. In 1934, it acquired Knight & Lee in Southsea, and Tyrrell & Green in Southampton. It also started rebuilding Peter Jones to modern design. In 1937, it bought Waitrose Limited, which operated ten counter-service grocery shops in London and the home counties.[10]

The biggest acquisition came in 1940, when JLP paid £30,000 for Selfridge Provincial Stores Limited, which owned 16 shops: John Barnes in Hampstead, Blinkhorn & Son in Gloucester and Stroud, Bon Marché in Brixton, Buckleys in Harrogate, A H Bull in Reading, Caleys in Windsor, Cole Brothers in Sheffield, Holdrons in Peckham, Jones Brothers in Holloway, George Henry Lee in Liverpool, Pratts in Streatham, Quin & Axten in Brixton, Robert Sayle in Cambridge, Thomsons in Peterborough and Trewin Brothers in Watford, substantially increasing the size of the business.

The Second World War took its toll, and several stores were damaged by bombing, notably the 'west house' of John Lewis, Oxford Street (on the west side of Holles Street), which was lost completely in September 1940. Some small businesses were acquired, including the John Pound leather goods shops, and two further department stores in Eastbourne and Tunbridge Wells.

In 1948, three drapery stores were created in South Africa, but these were closed in 1954.

In 1950, Spedan Lewis executed a second deed of settlement, which passed ownership of JLP to trustees to hold for the benefit of those who worked in the business. He continued to manage it as if he were still the owner, saying in 1957 that it was necessary to concentrate management in one pair of hands.[11]

Spedan Lewis also retained for himself the right to choose his successor when he retired on his 70th birthday in 1955. He had originally intended that Michael Watkins, his right-hand man for many years, would succeed him as chairman, but Watkins died in 1950. Spedan asked his son, Edward Lewis, if he would fill the role but he declined. Spedan appointed a loyal, long-serving lieutenant, Bernard Miller, but expressed the hope that in due course Edward would succeed Miller as chairman. In the event, Miller was succeeded by Peter Lewis, the son of Oswald Lewis.[7]

In 1953 JLP sold several small stores but acquired two large ones: Heelas in Reading and Bainbridge in Newcastle upon Tyne. The rebuilt store on Oxford Street was reopened in 1960, and the sculpture Winged Figure by Barbara Hepworth was added in 1962.

The principle and slogan never knowingly undersold adopted in 1925, is still honoured and has been widely copied. The principle has been refined, most notably to exclude retailers who trade only online. The pledge has recently been revised to include extended insurance and delivery charges when comparing prices.[12] John Lewis monitors local competitors, and reduces the shelf-edge price if it is being 'undersold'.

To accommodate national advertising, in 2002, the company began the process of renaming department stores not branded as John Lewis (Tyrrell & Green, Heelas, etc.) with the nationally recognisable name. Peter Jones in London remains the sole exception to this policy. The company experimented with smaller format stores, adding 12 At Home shops and 2 Convenience-driven stores, alongside 3 more full-line department stores (Leeds, Stratford, Birmingham).[13]

In 2012 and 2013, John Lewis faced a series of strikes by cleaners who had been outsourced regarding pay.[14]

John Lewis & Partners' flagship department store in Oxford Street

As of 2012 the John Lewis division operates 30 full-line department stores, 1 John Lewis click and commute at London St. Pancras International, 1 John Lewis convenience store at London Heathrow and 10 John Lewis at Home Stores and a web store.[10] The stores are in a mixture of city centre and regional shopping centre locations. The flagship Oxford Street store in London remains the largest John Lewis outlet in the UK.[20]

Newer John Lewis at home stores are opening to cater for areas which have no large John Lewis department store near them. They are around a third the size of a normal department store. The first store opened in Poole in October 2009. Croydon followed in August 2010 with Tunbridge Wells and Swindon opening later that year. In Autumn 2011, Tamworth and Chester were opened, followed by Chichester, Newbury and Ipswich in 2012. This type of store contains both Home and Electrical departments with services such as a cafe and 'Click and Collect' also available. A new 'flexible format' store was trialled in Exeter 2012, with full line of stock in a smaller physical store, relying heavily on 'click and collect'/next day delivery both in-store and out.[21]

Peter Jones is a large department store in central London. It is a store of JLP and located on Sloane Square, at the junction of King's Road and Sloane Street, in the Chelsea district, close to the Belgravia and Knightsbridge districts. Peter Jones was founded as an independent store but was bought by John Lewis, owner of the eponymous store in Oxford Street, in 1905. In 1929 Lewis's son, John Spedan Lewis, who then owned both businesses, combined them into a single business.

• John Spedan Lewis 1885–1963: Remembered by Some of his Contemporaries in the Centenary Year of His Birth with the editor being Hugh Macpherson. Mainly black and white, colour plates relating to the business of the John Lewis Partnership and links with Waitrose Supermarkets. With a foreword by Peter Lewis. Includes biographies of executives, and an index. Detail from a copy of John Spedan Lewis published by John Lewis Partnership in 1985 with no ISBN.
• Julia Finch, Andy Street: Humble MD who is never knowingly underpaid (9.3.2008) The Guardian