John Lewis in turmoil: First female boss is sacked as staff fear loss of their annual bonus

The John Lewis Partnership was thrown into chaos yesterday as its first female boss was sacked and staff were told their bonus could be scrapped.

The group, which includes Waitrose, had a dismal Christmas – and is on course to post ‘significantly lower’ profits for the year.

Critics said their annual festive advert, which this year featured a dragon called Edgar, ‘didn’t work’ after the company posted a 2 per cent drop in sales in November and December.

As the crisis rages, managing director Paula Nickolds, who has been at the helm for three years, has been sacked.

Mrs Nickolds, who started at the retailer in 1994, has already overseen the first half-year loss in the company’s 155-year history. 

The high street retailer is also threatening to cancel its annual staff bonus for the first time since 1953. The dire figures come amid a crisis on the high street. 

This week, the British Retail Consortium – which represents two thirds of the sector – said that last year was the worst for its members since at least 1995.

The high street retailer is also threatening to cancel its annual staff bonus for the first time since 1953. The dire figures come amid a crisis on the high street

In the past two years, House of Fraser and Debenhams have come close to disappearing from the high street and Marks & Spencer is closing 200 stores. 

Department stores have been hit hardest as shoppers turn to online competitors, especially to buy clothes and electrical items. Retailers are also battling a storm of rising staff costs, rents and business rates.

John Lewis’s ‘never knowingly undersold’ pledge has also come under scrutiny as heavy discounting elsewhere on the high street has forced it to lower prices.

It yesterday said fashion, make-up and skincare ranges performed well over the Christmas period.

But sales were dragged down by the home, electricals and home technology markets, which bosses partly blamed on low consumer confidence. 

Critics said their annual festive advert, which this year featured a dragon called Edgar, pictured above, ‘didn’t work’ after the company posted a 2 per cent drop in sales in November and December

Waitrose performed better, upping its sales and outperforming many of its supermarket rivals. But most concerning for the much-loved brand is its dramatic fall in profits.

The £26million half-year-loss will be ‘reversed’ by the year-end, the company said, but profits will remain ‘significantly’ down on the £160million posted last year and the £293million the year before. 

John Lewis Partnership chairman Sir Charlie Mayfield is also quitting – having announced his departure in November 2018 – and will be replaced next month by outgoing Ofcom chief Dame Sharon White.

The situation presents a huge challenge. One of her first decisions will be to choose whether to deny staff their much-coveted bonus. 

Dame Sharon will also take control of an enormous cost-cutting campaign, which has already shaved £300million off the business in three years.

Her appointment raised eyebrows in the industry because, having served as the boss of Ofcom – and before that, the Treasury – she has no retail experience. 

Sir Charlie said of the crisis: ‘You can never choose the weather. When the sun is shining you can make hay, but when the weather turns you have to spot the clouds early. I can’t say that we’re proud of our profit performance this year.’

There will also be a round of redundancies, as a third of head office staff are shown the door.

John Lewis Partnership chairman Sir Charlie Mayfield is also quitting – having announced his departure in November 2018 – and will be replaced next month by outgoing Ofcom chief Dame Sharon White