John Lewis’s flagship £35million store in Birmingham will never reopen after closing during lockdown, according to West Midlands mayor Andy Street.
The high-end brand has confirmed all eight retail sites announced in July as at-risk of closure, also including the Watford store, will close permanently.
The retailer said the affected stores were ‘already financially challenged prior to the pandemic and a number of contributing factors, including the shift towards online shopping which Covid-19 has accelerated, meant these shops would not be commercially viable in the future’.
It follows River Island announcing it will slash 350 jobs in a major store management shake-up – and another devastating blow for the high street.
John Lewis’s Grand Central department store in Birmingham, above, which had been closed since lockdown, will never reopen, according to West Midlands mayor Andy Street
John Lewis said it would work with staff to find new roles where possible.
In a statement, the business said: ‘This is a very sad occasion and one we never thought was imaginable when we first opened these shops.
‘Our expectation was that we would trade in these locations for many years to come, but they were financially challenged before the pandemic and we have not been able to find a way that would allow us to turn that around.
‘We are grateful to those who have expressed their support since announcing the proposed closure last month, and for the incredible professionalism our partners have shown – they remain our absolute priority and will be fully supported over the coming weeks.’
Speaking on a weekly video call with journalists on Friday, Mr Street said the proposal to plan the Grand Central department store in the West Midlands had ‘become a reality’.
He said: ‘A sad piece of news that is to do with John Lewis in central Birmingham.
‘We were contacted yesterday by them and they have indeed confirmed to their staff that the proposal to close the central Birmingham shop has become a reality and it will not now reopen.
‘That is despite myself, (leader of Birmingham City Council) Ian Ward and (chief executive of the West Midlands Growth Company) Neil Rami having met with them and put forward what we believe were very viable alternatives which they have chosen not to accept.’
River Island store on London’s famous Oxford street, Central London, could be affected
Mr Street, a former managing director of John Lewis, had been urging the chain to reverse what he called the ‘dreadful mistake’ of closing its Grand Central branch, since the proposal was announced at the end of July.
Meanwhile, high street fashion retailer River Island told staff it intends to slash store management and senior sales roles as part of a restructure of its retail team.
The move comes just a month after it had already said it would cut 250 head office staff as part of cost-cutting measures.
River Island has seen revenues and profitability hit by a slump in store footfall after reopening sites following the coronavirus lockdown.
Chief executive Will Kernan told staff in an internal memo that the changes will create a ‘flatter management structure with a greater emphasis on customer service’.
He said: ‘We need to make sure we have the right structures in place to deliver our omnichannel strategy, and to continue to deliver the amazing River Island in-store experience that our customers know and love.
Some 730,000 fewer people are now on the payroll than in March before the country went into lockdown to combat the killer disease
‘With a heavy heart, I can confirm that these changes will potentially impact up to 350 store management and senior sales roles.
‘Whilst this is an incredibly difficult decision, these actions are crucial to ensure that our stores continue to effectively play their hugely important role in our omnichannel future.’
River Island has around 300 stores across the UK and has reportedly eyed a Company Voluntary Arrangement (CVA) or other form of insolvency to reduce its rent costs in a bid to save money.
Analysts have warned the grim news is the tip of the iceberg, as the full effects of lockdown have so far been masked by the government’s massive support schemes.
The latest figures today showed that 9.6million jobs have been furloughed, with the Treasury paying out £33.8billion in subisidies.
Many people appear to have chosen to stay economically ‘inactive’ rather than hunt for work – meaning they remain outside the headline unemployment figures.
Figures released tomorrow are due to confirm that the UK has formally entered a recession – with a second consecutive quarter of GDP contracting.
ONS economist Jonathan Athow said: ‘The labour market continues recent trends, with a fall in employment and significantly reduced hours of work as many people are furloughed.
‘Figures from our main survey show there has been a rise in people without a job and not looking for one, though wanting to work.
‘In addition, there are still a large number of people who say they are working no hours and getting zero pay.
‘The falls in employment are greatest among the youngest and oldest workers, along with those in lower-skilled jobs.’