Fourth in a six-part series by Peter Cox, an East Finchley author.
Spedan Lewis had started his ‘industrial experiment’ at Peter Jones in 1914, just as war broke out and severely disrupted trade. So he knew what to expect in September 1939 when it happened again. This time, though, his Partnership contained six department stores and the tiny Waitrose food chain. His first act when trade plummeted was to lay off 5% of Partners – in truth, a very small number – while promising to re-employ them when trade revived. He appealed to the higher paid to ‘defer’ some of their pay, which would be reimbursed at the war’s end. In fact he was able to pay them back by 1942, adding 5% pa for inflation, and in that same year he introduced one of the very first company pension schemes. (John Lewis still has a generous final-pay pension scheme, though it may turn out to be one of the last as well…)
The boat rocked a little, but steadied, and, although there could be no thought of an annual bonus yet, prospects were improving until Hitler switched his bombing raids from the coast to London. Within a few days, on the night of 19th September 1940, a number of incendiary bombs landed on the west block of John Lewis in Oxford Street – the block the shop now occupies – and the fire spread rapidly in a westerly gale to the east block. Both were largely destroyed, and although trading began in a small corner within a month, bombs had damaged three of the other five shops, all on the coast, by the Spring of 1941. The business might have gone under, in fact, had not Spedan and his top team decided to buy in February of 1940 the Suburban and Provincial Stores chain owned by Gordon Selfridge, who feared Britain was doomed. Many of the shops were old and shabby, and the decision wasn’t an easy one, but they got for a knockdown price fifteen medium to large sized department stores dotted around the country. That very much spread the risk, and they kept the business, minus its great Oxford Street engine, chugging along until the end of the war and beyond.
But chugging was all the Partnership could manage after the war. A severe shortage of steel meant that re-equipping our badly damaged industries took priority, so that it was ten years before John Lewis could even begin the rebuilding of the (now smaller) Oxford Street store. In that ten years the business struggled to make enough profit to pay any annual bonus to its employees – it averaged just 2% between 1937 and 1955 – so Spedan Lewis retired at the age of 70 in 1955 a frustrated man. If he’d known that in the fifty years after 1960, when the Oxford Street shop finally came back on stream, the Partnership would perform so well that the annual employee Bonus averaged 16%, he’d have died a happy man. But, sadly, he didn’t, dying lonely, and somewhat embittered, in 1963 at the age of 78, when the recovery was just beginning. And Spedan’s shrewd intelligence in surrounding himself with really sharp minds meant that he had a powerful team to make it happen.
Next month – how Waitrose faltered, was nearly sold, then came good. 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.