John Lewis appoints first chief executive in bid to stop financial slide

UK retail group John Lewis has appointed former Hovis boss Nish Kankiwala as its first chief executive, as the group shakes up management to deal with rising costs and losses.

Kankiwala, who is a former PepsiCo and Burger King executive, will take on the newly created role of CEO, while Dame Sharon White will remain as chair.

The appointment comes as the employee-owned partnership struggles to remain profitable, partly because of high costs and falling sales at its Waitrose supermarket chain. Its rival Marks and Spencer is catching up in online grocery shopping, while Next is a fierce competitor in clothing.

John Lewis is two years into a five-year plan to invest in its stores and online, cut costs and diversify into other business areas such as financial services and real estate to compensate for shrinking margins in its core retail business.

Since the start of the pandemic, it has permanently closed 16 stores and made thousands of staff redundant, in an effort to bring down costs and reduce its debt burden.

Last month, executive director Pippa Wicks, who oversaw the John Lewis department stores, left after three years in post.

The group is the UK’s largest employee-owned company and shares profits among its staff, or “partners”.

“John Lewis has been on a downward trajectory of financial performance for some years now,” said Clive Black of Shore Capital. “It has had a failed store development programme, its offline and online don’t complement each other . . . bringing in a new CEO is an admission of that.”

Waitrose has lost market share to M&S in recent years, partly since online grocer Ocado swapped to selling M&S products in 2020.

Waitrose has further developed its own online grocery service since then and also has a partnership with Deliveroo, which now accounts for 1 per cent of its sales, according to its latest results.

Black said that John Lewis’s finances — it recorded a £99mn loss in the 26 weeks to July 30, 2022 — were preventing the partnership from making investments for growth.

“John Lewis is having to look inward and find resources to improve performance. It is definitely not in expansion mode,” he said. “Waitrose had a lot of intention to be a growth pole for the group; whatever way you cut it, it’s not been working.”

Kankiwala was chief executive of bread company Hovis for eight years, during which time he sold off most of the milling business to focus on baking and oversaw the company’s sale to private equity firm Endless.

He has been a non-executive director of the John Lewis Partnership since April 2021.

The executive directors of the two parts of the business will now report to him, while he will report to White.

“I am looking forward to playing an even fuller part in the transformation of the Partnership, to be a modern business loved by customers,” he said.


Business Asia
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