Growth Strategy: John Lewis Considers Opening New Stores for the First Time in a Decade – A Sign of Renewal for Retail.

The Indicator of a Major Retail Turnaround

John Lewis, the iconic employee-owned British department store chain, may be on the cusp of a historic turning point. Following a difficult period marked by store closures and post-pandemic financial losses, the company’s management is seriously considering opening new retail outlets for the first time in nearly a decade. This announcement, made by Managing Director Peter Ruis, is far more than just commercial news; it is a strong indicator of the renewed appeal of physical retail and confidence in the experiential department store model.

For years, the sector suffered from the rapid rise of e-commerce and successive lockdowns. John Lewis was not spared, closing sixteen sites and cutting thousands of jobs before returning to profit in 2023. While the company continues its costly operation of refurbishing its existing portfolio, the idea of territorial expansion suggests that the turnaround efforts, led by Peter Ruis, are bearing fruit. What are the motivations behind this potential return to growth? How does the 161-year-old company plan to reinvent itself so that its physical stores remain relevant in the face of the digital world?

The Department Store Confronts Crisis: A Look Back at the Rescue Operation

To understand the significance of potential expansion, we must recall the crisis John Lewis endured, a crisis that affected the entire retail sector.

A. The Devastating Consequences of the Pandemic

The period from 2020 to 2022 was particularly challenging for John Lewis.

• Closures and Job Cuts: Facing a collapse in sales and lockdowns that emptied city centers, the company was forced to take drastic measures: closing 16 sites and cutting thousands of jobs.
• Three Years of Losses: The chain, which is employee-owned (a unique model where profits are shared with staff), recorded financial losses for three consecutive years before achieving a return to profitability in 2023. This financial recovery, although fragile, forms the foundation for any new expansion ambition.
• The Expert’s Return: To lead these recovery efforts, Peter Ruis, a former fashion boss at John Lewis, returned last year as Managing Director. His return symbolizes the company’s commitment to leveraging strong internal expertise to drive change.

B. The Winning Bet on Physical Refurbishment

Before considering opening new stores, John Lewis focused its efforts on modernizing its 36 remaining sites. A costly but necessary gamble.

• Massive Investment: The company unveiled ambitious plans to spend £800 million by 2029 on refurbishing its existing store portfolio. This investment demonstrates a deep conviction that the physical store, far from being dead, simply needs to be reinvented.
• The Oxford Street Case: The flagship store on Oxford Street in London, which was the subject of a contentious debate, perfectly illustrates this turnaround. Executives had initially considered converting nearly half of the floor space into offices to generate revenue. However, following a stronger-than-expected rebound in in-person shopping post-pandemic, they ultimately chose to retain all six floors for retail, completing a major overhaul.
• Other Success Stories: Stores in High Wycombe (Buckinghamshire), Cheadle (Greater Manchester), and the site at Bluewater Shopping Centre (Kent) – the latter benefiting from a £10 million makeover that included a new “gifting emporium” – have also been modernized to enhance the customer experience.

The Reinvented Physical Store: Experience at the Heart of the Strategy

The key to John Lewis’s survival, and now its expansion, lies in a complete overhaul of the department store philosophy, transforming it into a destination rather than just a point of sale.

A. Eliminating the “Old Stuffy Department Store”

Peter Ruis clearly articulated his objective: “We are getting rid of the old stuffy department store and replacing it with something more experiential.” This concept, often called Retailtainment (a blend of retail and entertainment), aims to give customers reasons to enter and stay longer in the store.

• The Human Factor (Post-COVID): One of the most important observations after the lockdowns is how people have “gravitated back to the stores.” Ruis stressed that “the store is a perfect invention,” acknowledging that social contact, product interaction, and the in-person experience remain irreplaceable by e-commerce.
• Diversification and In-Store Innovation: To create this experience, John Lewis has integrated new concepts, for example:
  • Opening Waterstones bookshops within stores, creating a space for relaxation and discovery.
  • Introducing new trendy brands like Topshop (a former iconic chain) and high-end beauty products like Charlotte Tilbury, to attract a younger and more diverse clientele.

B. Looking Towards Expansion: Where and Why?

The idea of opening new stores, a first since the opening of the Cheltenham, Gloucestershire, site in 2018, is a sign of confidence in this new formula.

• Geographical Target: Ruis suggested that the company could target “new parts of the country.” This likely points to medium-sized cities or key regional areas where the presence of a quality physical department store is lacking, or where the demographics are favourable to John Lewis’s affluent and loyal customer base.
• Caution and Realism: Although expansion is “definitely something we are looking at,” a spokesperson clarified that there were “no immediate plans” for new store openings, suggesting that market research and final decisions will be made with the utmost prudence to avoid past mistakes.

Economic Challenges and the Future of John Lewis

Despite the signs of optimism, John Lewis operates in a difficult UK market, marked by high inflation and pressures on consumer purchasing power.

A. The Weight of the Macroeconomic Context

The company must navigate a complex economic environment where every expense is scrutinized by cautious consumers.

• First-Half Losses: John Lewis’s losses reached £88 million in the first half of the year. Although the company is targeting better results in the second half, this initial deficit places immense pressure on the crucial Christmas trading period.
• Political-Economic Factors: Management has publicly blamed some of its losses on Labour’s tax increases, citing particularly the rise in National Insurance contributions and the new packaging levy. These additional costs directly impact the retailer’s margins.
• Cautious Optimism: Peter Ruis himself summarized the situation with measured optimism: “I think we’re optimistic, but, you know, it’s a difficult market. It’s difficult for the customer.”

B. Digital and Logistics Integration

To ensure the survival of new stores (and existing ones), the seamless integration between the physical experience and online commerce is indispensable.

• The Uber Eats Partnership: John Lewis plans to expand its partnership with Uber Eats. This service allows customers to order beauty products and gifts for fast home delivery. This demonstrates a multi-channel strategy where the physical store can serve as a mini-distribution centre for rapid local deliveries.
• Improved Click-and-Collect: The modern department store must function as an efficient collection point for online orders, thereby optimizing customer foot traffic and cross-sales (where a customer collects a product and buys another item on the way).

The Era of Measured Expansion

John Lewis’s consideration of potential expansion, after nearly a decade of scaling back, is encouraging news for the entire retail sector. It validates the concept that, despite the dominance of e-commerce, there is persistent demand for the department store experience, provided it is modern, exciting, and experiential.

Under Peter Ruis’s leadership, the company is positioning itself not by expanding at any cost, but by paving the way for measured and strategic growth in regions where its new “experiential” formula is likely to thrive. The success of this expansion hinges on maintaining profitability in the second half of the year (particularly through Christmas sales) and the company’s ability to navigate persistent economic challenges. John Lewis, true to its history, appears ready to write the next chapter of its long legacy in the British retail landscape.