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John Lewis says retailers only need 70 stores for national coverage

John Lewis Partnership Plc said the growth of online retailing means U.K. retailers need no more than 70 stores to gain nationwide coverage amid a tough economy.

John Lewis, which owns 36 department stores and gets about a quarter of sales online, will have “many less” outlets than it had envisaged five or six years ago, Andy Street, managing director of the chain, said in a speech at the British Retail Consortium Symposium in London.

“We believe that national coverage for an online retailer in 2020 is no more than about 60 or 70 shops,” he said. “The days for needing 200 to cover the U.K. are clearly history.”

Dixons Retail Plc, (DXNS) the U.K.’s largest electronics retailer, said last week that it planned to reduce U.K. store numbers to about 400 from 557, including only about 40 in city centers, as it integrates its store-based and Internet businesses. Companies including Home Retail Group Plc’s (HOME) Argos chain are also reducing store numbers, while ramping up their online presence.

“It’s all about clicks and bricks together,” Street said. Online sales at John Lewis are growing at an annual pace of about 40 percent, the executive said.

John Lewis plans to develop three formats, including a new chain of smaller department stores, the first of which is due to open in Exeter, southwest England, Street said. The retailer will also add home-furnishing outlets, where shoppers can collect orders placed online for items not necessarily sold in the store. It will open fewer of its full-line department stores, or “regional flagships,” Street said.

Source: Sarah Shannon - Bloomberg
http://www.businessweek.com/news/2012-06-26/john-lewis-says-online-growth-means-retailers-need-fewer-stores

26 June 2012
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