John Lewis, the UK department store chain, will not reopen eight of its 42 stores after the current lockdown ends in April, putting more than 1,400 jobs at risk.
Department stores in Aberdeen, Sheffield, Peterborough and York will remain closed, plus four smaller “At Home” stores in Tunbridge Wells, Ashford, Basingstoke and Chester.
A total of 1,465 roles are threatened by the closures. A similar number of jobs were lost last year when eight other stores did not reopen after the first lockdown. The latest closures will reduce the estate to 34 department stores.
The group, which is the UK’s biggest employee-owned business, said the decision followed “substantial research to identify and cater for new customer shopping habits in different parts of the country” and that the eight stores were “financially challenged” before the pandemic.
“Given the significant shift to online shopping in recent years — and our belief that this trend will not materially reverse — we do not think the performance of these eight stores can be substantially improved,” it said.
The group has previously said that it expects at least three-fifths of revenues to be generated online, even when shops are trading normally again.
“Having fewer bigger stores allows us to invest significantly to improve our remaining ones,” it said. The group intends to invest heavily in services such as personal styling, interior design and beauty demonstrations, both in stores and online.
It will also test new smaller, local shops, along with stores within its Waitrose supermarkets, citing the success of mini John Lewis sections in six existing stores.
Previous attempts to do this, such as the John Lewis At Home and Waitrose Food & Home formats, have had mixed results.
Bryan Roberts, an independent retail analyst, said John Lewis and Waitrose had been “oddly at arm’s length” in the past, leading to “two decades of missed opportunities”.
John Lewis went into the coronavirus pandemic with a total of 50 stores, an amount many considered about right compared with rivals such as Debenhams, which had well over 100 and has since gone into administration.
But the pandemic has laid bare the difficult economics of large stores, which often pay peppercorn rents but have other high fixed costs. Even small declines in sales can radically reduce profitability.
“The environment has deteriorated dramatically over the past few years,” said Nelson Blackley, another independent analyst. “Closing these stores reasonably quickly makes more sense than keeping them open.”
Last year’s closures included Watford, where the store paid no rent but which in effect competed with branches in Hertfordshire and London.
Among the latest closures, John Lewis in Sheffield agreed new multi-decade lease terms with the city only last year. A statement from the council described the decision as “sad news”.
The York store is located in an out-of-town retail park and opened only in 2014, while Peterborough was revamped at a cost of £21m just two years ago.
Last year, the company also closed a flagship store in Birmingham that had opened in 2015.