Retail lift for John Lewis
A POWERFUL, experienced chairman can make a great difference in retail, as was learned at Marks & Spencer. The choice of Jason Tarry, formerly of Tesco, to succeed Sharon white as executive chairman of John lewis looks smart when there are so many different forces buffeting department stores and grocery.
White was full of creative ideas, and in spite of strained relationships with partners spent five years of hard grind seeking to turn the tanker about. She restored profitability in the last year.
To her credit she recognised that it was time to step aside and bring a different leadership to the table.
Tarry will be the executive chairman, in contrast to Archie Norman, technically an independent chairman of M&S.
John lewis and M&S may be aiming at much the same markets in middle Britain but culturally, they are quite distant.
Tarry says he has been a long term admirer of the ‘employment ownership’ model. The reality is that his background at Tesco is very different, where bosses have been sun kings and not had to worry too much about bringing colleagues along with every decision. Suspended bonuses for John lewis partners means Tarry will need to show some subtle engagement skills.
An unresolved issue is his ongoing relationship with chief executive Nish Kankiwala who was brought in last year to add merchandising weight to John lewis.
There must be concern that an executive chair might find power sharing a strain. As we have seen recently at M&S with the departure of co-chief executive Katie Bickerstaffe, navigating such arrangements can be tricky.
The selection of Tarry raises questions as to whether someone brought up in the Tesco culture of founder John Cohen, pile it up and sell it cheap, will adapt to premium branding at John lewis. food arm waitrose, currently enjoying a renaissance, is vital. But it should never be forgotten that upmarket fashion, smart electronics and swish home furnishings are all part of the John lewis appeal.
Partnership and co-ownership can be difficult. The recent projection of a drop in profits at the Co-op Group shows strains in a competitive food market place. Nationwide is facing a grassroots membership revolt because of a lack of consultation over its £2.9bn deal for Virgin Money.
Running employee or partnership owned firms is not a walk in the park.
Dimon dust
A FORECAST of stickier inflation and higher interest rates from Jp Morgan chairman Jamie Dimon caught the zeitgeist on US bond markets where yields are rising.
In an action packed letter to investors from the world’s most enduring commercial banker, there is much to chew on.
Dimon believes that Basel 3, the rules being devised by central bankers and regulators to avert the next banking crisis, could endanger output by being over-restrictive. He thinks that given current geo-political and economic trauma, it is the right moment to rebuild global architecture with a new Bretton woods. He has a point. The world Trade organisation is being wrecked by American intransigence and the enormous subsidies it is throwing at bringing semi-conductor production to the US. Taiwan Semiconductor Manufacturing has just announced that it is to raise total investment in chip making on US soil from £32bn to £51.5bn.
The world Bank and IMF need to rethink amid the way in which russia and China, invited into the inner circle, are abusing the system. China’s blockage on debt restructuring in Sri lanka was a case in point. The Jp Morgan chief’s comments ahead of next week’s spring sessions of the G7, IMF and world Bank ought to be a trigger for change. Don’t count on it.
Shell shock
BRITAIN'’S green zealots and the labour party should pause if they don’t want to destroy the UK’s financial ecosystem.
Shell chief executive wael Sawan tells Bloomberg that the valuation gap between london and New York, fuelled by european investor apathy towards fossil fuels, could drive Shell to re-list in Manhattan.
That would be an enormous blow to the City, Britain’s reputation and the nation’s tax revenues and dividend pay outs. Yikes!