Business Interview: Karen Matthew, manager of John Lewis Newcastle

New store manager enthuses about partnership model and John Lewis' 'omnichannel' future

Karen Matthews of John Lewis Newcastle
Karen Matthews of John Lewis Newcastle

Before I met Karen Matthew, manager of John Lewis’ Newcastle store, I had never heard the word “omnichannel”. By the end of our meeting, I have heard it five times.

Which is not to say that Karen tends towards jargon, rather that she has a clear vision of how John Lewis – 150 years old this year – and its Newcastle store (with a fine history of its own; still called Bainbridges by some more senior customers) can survive in the digital age.

Having worked for John Lewis for much of the last 30 years – with brief spells away for maternity, running her own business and working for rivals Marks and Spencer – Karen is well placed to understand the challenges the firm faces.

In an age when online giants Amazon can use their advantageous tax arrangements to not only stock but heavily discount hundreds of thousands of items, many have doubted whether stores like John Lewis – with their overheads of staff and premises – can survive.

But that “omnichannel” vision, with the company’s stores complemented by its website and often working in tandem with it, offer hope. And by the figures I see at the staff entrance for how much the store took on Black Friday – figures I’m not allowed to share, I’m afraid – the signs are that the firm and its Newcastle store are in rude health.

Figures that have been made public show how the John Lewis group as a whole broke records for its 150-year history in the week that included Black Eye Friday. In that week, the company took in £179.1m, with online sales up 42% year on year.

A detailed “Christmas barometer” released by the company a week later showed in even greater detail what Britain is buying this festive season. Women’s own-brand cashmere accessories were up 51% on last year, stainless steel roasting pans up 39%, Nespresso coffee machines up 11%.

“The run-up to Christmas is all important to us,” Karen said. “The whole picture can change in December. It’s absolutely our most important month.....well placed going into December.

“It’s shaping up to be another record Christmas for the partnership but we’re not complacent.

“We always know that we have to keep raising the bar, keep doing things in a way that our costumers expect and exceeding their expectations where we can.

“We’re pretty confident that it will be a record-breaking Christmas for the business.”

The Christmas period has been a baptism of fire for Karen, who only started work leading the Newcastle store in September.

But she has a long history with John Lewis, joining as a graduate trainee 30 years ago, working in its Edinburgh and Aberdeen stores before a spell in head office, and then leading the launch of the John Lewis At Home concept. Before coming to Newcastle she headed the At Home’s “North” division, which stretched from Exeter to Aberdeen (being basically everywhere outside London). What has helped that record-breaking Christmas is the “omnichannel” (that word again) nature of John Lewis’ current offering.

“We believe this will be the biggest click-and-collect Christmas for the partnership,” Karen said, “with more than 50% more of our orders being collected in store than being delivered to a home address.

“It’s an interesting dynamic for us. Click and Collect is a fantastic service, but it also means that customers come into the shop and hopefully we have the opportunity for them to not only pick up their parcel but also do a bit of cross shopping.

“Click and collect is very important for us. In this day and age, while we have a big shop, we are limited as to the assortment. Online opens us up a whole plethora of other things. It’s almost endless in terms of the proposition we can offer our customers. Online is a challenge to retail but it’s also a huge opportunity. We’re fortunate at John Lewis to moved into that online world at an early stage and we’re market-leading in terms of our omnichannel proposition nowadays.

“It allows us give the customer the convenience they’re looking for, it allows us to grow the assortment and it means that we’re still able to offer the service proposition. In terms of the ratings we give products and from our customer feedback, added to our partners’ in-depth knowledge, it allows customers to do their homework, perhaps before they come into the shop, or vice-versa: they can come into the shop, they may choose to buy there and then or they may choose to go online and buy it.

“To us, it’s all the same. Our measure now is total catchment, not just branch sales or online sales.”

Part of John Lewis’ success, Karen believes, is its unusual co-operative structure (Karen never talks of staff or workers – they are always “partners”).

The partnership model provides an annual bonus for staff, generous holiday and pension arrangements and the odd quirk too, such as the chairman of the company having to write everything in green ink. Locally partners voted on a raft of key changes for the Newcastle store, from re-branding from Bainbridge to John Lewis (it had been part of the group since 1953 but retained its old identity), to ending the now rather quaint Monday, and later Sunday, closing.

At a time when that other prominent model of the partnership model, the Co-operative Group is mired in problems, John Lewis is a beacon for those who champion employee-owned businesses.

“It sounds a bit clichéd but there’s a real family approach to the business,” Karen said. “I, possibly naively, thought Marks and Spencer would be a company with similar values, but it felt very different.

“There’s a trust of each other here, an inherent sense that this is our business and we need to look after it. That makes you feel very proud as an employee and an owner of the business.

It’s not just all about the bonus at the end of March, although that is lovely. It’s something that works for us throughout the year, and year-in-year-out, because we want to get it right for each other but also to get it right for our customers. Sadly, that’s not always the case in retailing these days. I can confidently say, having been on both sides of the fence, that it does make a difference.

“The principles can apply to any industry. There’s most publicity about it nowadays. Our chairman is a huge advocate of partnerships and he takes every opportunity to talk to any organisation willing to listen on the merits of running a partnership.

“It’s certainly stood us in good stead. We’re 150 years old this year, and we’re still going strong. Our figures are buoyant, our customers seem to like what we have to offer. It’s that trust element that really comes through, trusting each other as partners but also customers trusting us that they’re going to get the right advice. And be never knowingly undersold.”

Karen said she has been impressed by the partners she took over when she got the manager’s job at Newcastle and also by the welcome she received both from them and the rest of the city. She is aware too of the importance John Lewis has within the city, though she is outspoken that it needs to improve both in terms of cleanliness and making it easier for motorists to get into the city.

“It’s all about working together,” Karen said. “I can see that there are opportunities for the city.

“I’m very keen to engage with other retailers and also the council and NE1 and NGI to maximise these opportunities because I’ve worked in a lot of cities throughout my career, I’m familiar with a lot of cities.

“I’ve come to Newcastle and can see things that need to move ahead.

“For me it’s all about that dialogue and how we can help each other. I absolutely see the aspiration and what we’re aiming for in Newcastle.”

The Questionnaire

What car do you drive?

BMW convertible but I sometimes borrow my daughter’s Fiat 500.

What’s your favourite restaurant?

The Secret Garden in the Royal Mile, Edinburgh

Who or what makes you laugh?

Michael McIntyre, The Big Bang Theory, my husband’s dress sense!

What’s your favourite book?

To Kill a Mockingbird by Harper Lee

What was the last album you bought?

In the Lonely Hour by Sam Smith

What’s your ideal job, other than the one you’ve got?

A lifeguard on South Beach, Miami, Florida

If you had a talking parrot, what’s the first thing you would teach it to say?

“No, it’s not a new dress, she’s had it for ages!!”

What’s your greatest fear?

Heights - I couldn’t do a bungee jump if you paid me £1m.

What’s the best piece of business advice you have ever received?

Be an authentic leader – just be yourself

And the worst?

Believing your own press – it’s a slippery slope!

What’s your poison?

I love a glass or two of chilled prosecco, which I will be enjoying on Christmas Eve

What newspapers do you read, other than the Journal?

The Scotsman and The Sunday Times

How much was your first pay packet and what was it for?

When I was 16, I worked as a Saturday girl in our local bakers and my first pay packet was £5

How do you keep fit?

Ha ha....are you kidding? I used to swim for Scotland but I haven’t been in a pool for a long time, other than on holiday. That said, I probably walk a few miles around the shopfloor every day!

What’s your most irritating habit?

Ignoring the alarm in the morning.

What’s your biggest extravagance?

Apart from the house and car, it’s my Mulberry Bayswater handbag which is 13 years old but I still love it

Which historical of fictional character do you most identify with or admire?

Mother Theresa – such an amazing, inspirational woman

Which four people famous people would you most like to dine with?

Barack Obama, John F Kennedy, Marilyn Monroe and George Clooney

How would you like to be remembered?

As a good daughter, wife and mother...... and someone who listened and cared about people

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer