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The Story of the John Lewis Partnership

Third in a six-part series by Peter Cox, an East Finchley author.

In 1914, just as war engulfed Europe, Spedan Lewis took over the sole running of Peter Jones in Sloane Square.  It was a mess.  It was making a loss – its most profitable ‘department’ was the pub it owned on the Kings Road corner, and its product range was strangely downmarket for a business on the edge of Belgravia.  It wasn’t the owners of the big houses who shopped there, but their cooks and housemaids, butlers and gardeners.  Spedan went through the place like a tornado.  He overhauled the Buying side, upsetting complacent buyers by posting up their weekly sales so everyone was could see how they were doing.  He overhauled the dreary living-in accommodation above the shop, allowing the assistants to choose their own furnishings, and changing its regime to something closer to a hotel than a prison.

But he alarmed his management team most by declaring that incomes were too low, and raising the minimum wage about 20%.  ‘No successful business that makes a profit should do so without paying a decent living wage for every employee’.  His accountant protested that they weren’t yet making a profit – sales were up but so were costs – but Spedan pressed on.  When after a difficult war there was a boom year in 1919 he decided the time had come for his most daring experiment.  He persuaded the shell-shocked shareholders, who had not had a dividend for years, to agree to his plan to turn Peter Jones into a partnership of his own devising, effectively donating it to his staff.  He would still run it, but share its profits with them, and in early 1920 everyone was staggered to receive a bonus of 15% of their pay.  He started a regular journal, the Gazette, with the masterstroke of an anonymous letter column so they – now called Partners – could let off steam.  And he began a staff ‘council’.  All these still exist in a very similar form, with the addition (in 1946) of elected Board members.

Then came trouble.  He had a relapse of his lung complaint and took time off at just the wrong moment.  Trade crashed in 1921-2, and Peter Jones came close to bankruptcy.  In dragging the business upmarket he had overstretched it.  At Oxford Street meanwhile his father, still running the shop in his eighties, increasingly intransigent, faced down a five-week strike and continued to thrive.  To many Spedan’s idea began to look like dangerous lunacy, but he steadied, and a family rapprochement, brokered by his mother and helped by Spedan’s marriage and the arrival of their first son, led to his father pumping cash into Peter Jones.  By 1928, when old John Lewis eventually died aged 92, Spedan could incorporate the Oxford Street shop into his Partnership arrangement, which he tied up with a virtually unbreakable Trust.

In the next decade Spedan rode the Thirties trading rollercoaster with a surer touch.  He expanded the original department store in Oxford Street in both directions, acquired four extra department stores, bought a tiny suburban food chain called Waitrose in 1937 (which most people thought a rather peculiar decision…) and had Peter Jones rebuilt to a spectacular award-winning design.  He bought factories, a country estate in Cookham for his Partners to enjoy, working farms in Hampshire – nothing, said his successor as Chairman, was too zany to look at.  He was unusual in recruiting seriously bright people from Oxbridge – a graduate was a rare bird in the hard-bitten world of Retail – including his clever wife Beatrice, who stood up to him, put on Revues, and became his deputy Chairman.  His ‘industrial experiment’ was a success.  But then…

Next month – the war, and disaster.  Peter Cox’s book Spedan’s Partnership – the Story of John Lewis and Waitrose – can be bought for £20 at all good bookshops, and at £15 incl P & P from his website www.spedanspartnership.co.uk.

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