John Lewis steps into Singapore as part of wholesale export plans
John Lewis is to step into Singapore as part of plans to export to 15 countries over the next few years.
The retailer, which is scheduled to reveal its annual profits and staff bonus on Thursday, has signed a deal to open concessions in two Robinsons department stores in the city-state in July. They will be run by Robinsons staff and mostly sell homewares under the John Lewis brand.
Andy Street, chief executive of the British department store, said he expected to announce deals in up to five other countries this year.
It follows a successful trial in South Korea with the Shinsegae department store, begun in 2012. John Lewis sheets, towels and tablecloths made at the groups’ Herbert Parkinson factory in Lancashire as well as other home accessories such as candles and picture frames are now sold in seven Shinsegae stores.
Street said: “We have been very successful in Korea. We are really pleased and surprised that, in a market where the John Lewis brand isn’t really known, it has cut through.”
The retailer recently invited representatives of international department stores to a showcase at its Peter Jones outlet in Sloane Square, London, in the hope of attracting new partners. Street said he hoped to be shipping John Lewis products wholesale to 15 countries “in the not too distant future”.
Street said the push overseas was not a response to a tough UK market but an attempt to “seed” the John Lewis brand abroad for the long term.
“Anybody taking their eye off the domestic ball at the moment would really regret it. We are not opening shops overseas and diverting management time. This is the icing on the cake,” he said.
“Our fundamental strategy is developing bricks and clicks in the UK. We have just got to put a chip or two down on the table with a view on how the world is going to be in 10 years’ time.”
The department store’s parent group, the John Lewis Partnership, is expected to announce fall in annual profits of about 8% on 12 March despite benefiting from fast-growing online sales.
In the first half of the group’s financial year, bumper profits at its department stores were offset by a fall at the Waitrose supermarket chain. Profits will also be affected by an extra holiday pay bill and increased pension contributions after an employment tribunal forced a change in the way all British companies calculate holiday pay.
The group hands a share of its profits to staff. Last year, they were awarded a 15% bonus, equivalent to almost eight weeks’ pay but that was a drop on the 2013 payout of 17%. This year’s payout is expected to be smaller again.
John Lewis remains on the expansion trail in the UK even as other major retailers, including Marks & Spencer, Tesco and Topshop owner Philip Green’s Arcadia Group have been closing stores. Street said John Lewis still had relatively few outlets and the city centres it was targeting would not die away as shopping destinations.
A homewares store is set to open in Horsham, West Sussex this autumn and a large department store in Birmingham later this year as part of the redevelopment of the city’s New Street station. Further outlets in Leeds, Westfield’s White City shopping centre in west London, Chelmsford and Oxford are also planned.