John Lewis’ new boss faces a battle to boost online sales
Another cloud appeared in an already gloomy sky for John Lewis on Monday, when its managing director, Peter Ruis, announced his surprise departure. Just days before, an internal interview with the group’s chair, Jason Tarry, was leaked to the press, in which he warned of a “really tough” period for the firm.
Ruis’s decision to step away from the department store firm came as a shock to the industry, with the executive having only rejoined the group in January 2024. The Partnership, which also owns Waitrose, said on Monday that his departure in September will allow him to “pursue new projects”.
Ruis’s turnaround of the retailer will be cut short, just as the group’s chair warns that a period of falling sales is on the horizon. “We have to adjust for an immediate future that we weren’t expecting even six months ago, let alone a couple of years ago,” Tarry said in a staff magazine first seen by the Financial Times.
“It’s been a blast,” Ruis wrote on LinkedIn, though he provided no further details on the reasons behind his departure. He named the reinstatement of John Lewis’s iconic ‘never knowingly undersold’ pledge as one of his proudest achievements, alongside the refurbishment of flagship stores in Liverpool, Oxford Street and Bluewater in Kent.
Ruis had driven £800m into refreshing the partnership’s stores – which he described as “old” and “stuffy” – in a bid to appeal to shoppers’ increasingly tight wallets. This included the return of Topshop to high-street retail and revamping the retailer’s beauty halls.
Though John Lewis’ high street presence was in dire need of an update, its switch of leadership could redirect attention to the group’s online platform.
“Peter’s playing field is in [the] stores,” independent retail analyst Richard Hyman told City AM. “It doesn’t mean that he’s not attuned to online, but Peter’s strengths are really crystalised in-store, and arguably that’s exactly what the business needed.”
But Hyman suggested that Ruis’s successor, former River Island boss Will Kernan, may put more effort into driving the group’s online sales.
John Lewis chair ‘cautious’
The department store has struggled to face up to increased competition from online rivals in recent years, though it reported an 11 per cent increase in online sales in the last year. John Lewis’s challenge lies in boosting the profitability of its online platform – which now accounts for 60 per cent of its near-£4bn revenue – Hyman said.
John Lewis’s next managing director will inherit an increasingly cautious customer base squeezed by high taxes and rising costs. Last year, the group warned of new “headwinds” posed by extra taxes, as it paid £168m in employer contributions and £166m in business rates.
While these challenges are shared by John Lewis’s competitors, Kernan will have to contend with the unique difficulty posed by the partnership’s staff bonus model. The retailer had historically handed out a bonus every year but cut the extra pay for the first time in 2020, prompting a widespread backlash.
Tarry reinstated the bonus this year because of its “improving cash generation [and] good liquidity”. But the chair warned that he remains “cautious” for the years ahead, suggesting that the group could be forced to cut the bonus again if conditions worsen.
Kernan will take charge in the middle of September, having served as a non-executive director on the group’s board since 2023. He is currently chairman of Neptune, an upmarket furniture seller, and has held leadership positions in UK retail for the past 35 years.