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The Story of the John Lewis Partnership

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

By the start of the 20th century, John Lewis had expanded his little shop in Oxford Street into a full-blown department store, and built an imposing house at the top of Hampstead Heath.  He and Eliza, the Girton graduate he had unexpectedly married, had two sons, both doing well at Westminster School: Spedan and Oswald.  But their father was getting on.  In his late sixties he was often ill, increasingly cantankerous, and Eliza was worried he might do something daft like going into partnership with a rival.  Spedan, a brilliant if somewhat lazy scholar, would be expected to go with his peers to Oxford, but Eliza persuaded him to join the business.  So did Oswald, and when each son reached 21 their father was generous enough to give them a quarter share of the company, a substantial fortune.

Spedan, intelligent and curious, was soon up against his father’s intransigent refusal to modernise John Lewis.  He hated spending money and he underpaid his staff.  Spedan saw that his father’s trading principles were sound – to give excellent value, good customer service, to be scrupulously honest, and to hold a wider range than his competitors – and he’d had excellent ideas.  But they were haphazardly applied.  For example his father had a painstaking system of dating every item as it arrived, but when Spedan checked the baby’s clothing section he found a garment bought in the year he was born.  As time went on Spedan grew more frustrated and his father more stubborn.  In 1909 Spedan had an offer from the Liberals, then in power, to become an MP.  He might have done so, but for a nearly tragic accident.

Spedan came into work on horseback, riding sedately through the Heath and Regents Park to Weymouth Mews, where John Lewis’s delivery horses were stabled.  But one day in May 1909 his horse shied and threw him.  Being a stiff-upper-lipped Englishman he battled into work, and told nobody – until he collapsed a day later.  For the best part of two years he suffered from the unpleasant and dangerous pleurisy and empyema, and was laid up for much of the time.  But the enforced idleness got him thinking.  Before his fall he’d seen his father’s books, and was amazed to learn that together the three owners took out of the business almost exactly the same as their 300 underpaid employees, about £1.5m in today’s terms.

No wonder the employees, as his father complained, never seemed to care about their work.  They had no stake in its success, so why should they?  Spedan set out to devise a scheme to construct a business which was owned by all the employees.  But how could he do it in such a way that they wouldn’t simply sell it as soon as they could?  In October 1910, in the bath at a nursing home, he had a eureka moment.  He’d give them all non-voting shares.  He’d still run the business, on their behalf, but he’d create a form of Trust that couldn’t be broken.  The problem was, he didn’t have a business to experiment on.  Unless… In 1906 his father had bought the ailing department store Peter Jones in Sloane Square, but completely neglected it.  It was making no money, so Spedan asked his father if he could run it.  All right, came the reply, but only if you do it in the evenings: your place is here.  In 1913 Spedan got down to work and set out to transform a down-at-heel, surprisingly downmarket business.

Next month –Spedan Lewis takes Peter Jones by the scruff of the neck, and transforms it into a Partnership, co-owned by all its employees.  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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