‘Despite the demise of many department stores, the format remains relevant today’

John Lewis now refers itself as an omnichannel brand rather than a department store and, with the majority of its sales online, that is operationally correct, and describes many modern retailers.

However, in the eyes of the shopper its physical embodiment is as a department store. Despite the demise of so many traditional department stores such as Debenhams, and mediocre examples such as Sears and Saks in the US and Kaufhof in Europe, the department store format remains relevant.

The traditional department store model, with a full range of departments, products, and services is a model we love – as long as it is well run, delivers an inspiring environment, and great customer service. That’s something that John Lewis is once again fulfilling. The businesses that have failed used space expansion to drive sales, often funded by large amounts of debt, rather than invest in the stores and customer experience.

Department stores have the big advantage of flexibility. They can change space allocation, products and brands according to demand, partner with brands for new product launches ahead of the market, (such as the Oura watch at John Lewis in Christmas 2024) and have an inherent authority in beauty and fragrance. Department stores are anchors to our physical shopping – see the outcry when Binns was about to close in Darlington. But, needing so much space, being profitable is a challenge.

According to the industry definition Marks & Spencer and Next are department stores – they have home ranges, and are both building up their beauty offering. Next’s latest stores in Bluewater and Eldon Square look like department stores and Next has introduced Bath & Body Works to its shops, but neither yet have the authority John Lewis has in beauty, or indeed in home and technology. Though they have both added outside brands online, their stores are primarily own-brand ranges and in the eyes of the consumer still equate to the chain store model rather than a department store.

That said, having a distinctive and stylish own-brand range is an advantage when it comes to international expansion. As Next chief executive Lord Wolfson noted in a recent results meeting, fashion is becoming global owing to social media, which makes it easier to expand into new markets due to fewer local taste barriers. And using the online channel and local aggregators, as well as local retailers, reduces the risks of international expansion.

“On the other hand, department stores are not easy to expand internationally. They tend to reflect local cultural tastes”

M&S’s new fashion partnership with David Jones in Australia is an example of this – though of course one can argue that Australian apparel tastes are very similar to those in the UK.

M&S has chosen the well-established premium department store (apparently the oldest continuously operating department store in the world still trading under its original name) to showcase its ranges and spearhead its global expansion in fashion. Choosing a department store with local stature will display the brand in the best possible light and underlines the advantage of department stores in having the flexibility to choose which brands fits its model.

On the other hand, department stores are not easy to expand internationally. They tend to reflect local cultural tastes. La Rinascente is very Italian, Illum very Danish, Bloomingdales very US. The Thai conglomerate Central Group understands this and has expanded its department store business by buying iconic local brands such as Selfridges and KaDeWe.

Though John Lewis has developed own brands, it should revel in its department store advantages – having authority across so many product areas, creating an inspiring in-store experience as well as its expansive online offer – and its customer service.

The latter had become a weakness in recent years, but the investment in training is paying off if my experience of buying a TV from its Oxford Street store is an example. From the knowledge and unbiased advice of the young guy in the TV department to delivery and set-up, the service could not be faulted.

This, with its value proposition, will make it a destination again and, hopefully, build the profit to enable the partners to receive another bonus.