White loses crunch John Lewis staff vote

Mutual chairman fights to contain backlash after scrapping employees’ annual bonus

DAME SHARON WHITE is fighting to contain a backlash at John Lewis after losing a vote by its staff council on her management of the business.

The chairman’s authority suffered a blow yesterday when the 58-strong council said that it did not have confidence in John Lewis’s performance under her leadership over the past year. The council backed Dame Sharon’s future strategy in a second vote, but analysts said the results were none the less a significant public embarrassment. Clive Black, of Shore Capital, dubbed the results a “self-inflicted wound”.

John Lewis insisted that the vote on the future was the more important of the two and denied that a rebellion had taken place.

It comes amid growing disquiet after John Lewis, which owns Waitrose as well as the eponymous department stores, posted an annual loss of £230m and scrapped its annual staff bonus for only the second time in 50 years.

Dame Sharon told a biannual staff meeting at the company’s Odney Club holiday retreat in Berkshire that John Lewis would emerge stronger. Quoting the writer Vivien Greene, she said: “’Life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain.”

Dame Sharon added: “I love that quote. It says, in other words, it’s not the tough moments themselves, it’s how you respond to those tough moments that really counts.

“It’s a real test of your mettle and the strength of your partnership.”

Members of the staff council are elected by John Lewis employees, who jointly own the business. The council votes on the chairman’s performance twice a year, although the wording of motions is not always the same and the results are not always publicised. John Lewis refused to say how close each vote was. Though the votes are not binding, they are expected to pile further scrutiny on Dame Sharon’s performance as she races to revive the partnership.

Chris Earnshaw, president of the council, said: “The council voted in support of the chairman to progress the partnership in relation to its purpose, principles and rules.

“The council did not support last year’s performance, in which we reported a full year loss and no partner bonus.”

He said the meeting was “central to how we exercise our democratic principles and ownership of the business”.

Analysts questioned the decision to make the outcome of the votes public at a time when Dame Sharon is already facing pressure over her strategy.

Mr Black said: “It’s like washing your dirty linen in public when most private companies wouldn’t countenance such a display.

“I’m sure it will be a really disappointing day for Sharon and you’ve got to hope the team regroup and start facing the right direction together, because if they keep going as they are they are just going to self-implode.”

A spokesman for John Lewis said: “No one in our business was happy with last year’s performance and the Council was able to share that view – that shows our democracy working.

“There’s no backlash and everyone is focused on pulling together to improve our business for customers.” John Lewis has been battling inflation over the past year, which Dame Sharon said had “hit like a hurricane”.

The company has been racing to strip out an extra £600m of costs after losses swelled to more than £230m in its latest financial year.

In her speech before yesterday’s vote, Dame Sharon said the pay situation was “unbelievably tough”. She added: “I wish we could have paid partners more this year but that would have come at the expense of jobs.”

Dame Sharon added that the partnership would “always be an employeeowned business, no ifs, no buts”.