Powering a renaissance: Nish Kankiwala has retail in his blood
Retail is in the blood of Nish Kankiwala, the former Hovis boss who has become the first chief executive of the John Lewis Partnership, owner of the Waitrose department store chain and grocery stores.
His family came to the UK from Mumbai, India, in the 1960s.
At first, their parents could not afford Kankiwala and her sister to come to London, so the children stayed with their grandparents, who owned six sari shops.
“I used to go shopping on the way to school,” she says. I love fabrics.
Sounds ideal for a man who will be responsible for all of John Lewis’s cushions, drapes, and gorgeous upholstered sofas. Not to mention the mythical haberdashery and clothing departments.
Kankiwala originally ran a clothing stall in Walthamstow Market in East London.
He was also running the family shop attached to a post office in Tottenham, north London, when his father fell ill while studying for his degree at University College London. “I studied engineering, but I couldn’t escape my retail destiny,” she laughs.
Kankiwala finds himself back in the shop on one of the toughest jobs in the industry – restoring John Lewis and Waitrose to their former state. The two chains were once synonymous with quality, service and being the undisputed destination of choice for Britain’s middle-class shoppers.
Waitrose, for example, was the first British supermarket to sell hummus, in the 1980s, and sushi, in 1996, as well as being the first to offer organic products.
It has its own farm and was the first to have its own vineyard. In a sign of the times, it also has the largest value range with over 900 ‘Essentials’ products.
Though his middle-class credentials still run deep, there’s even a ‘Heard at Waitrose’ satire on social media, gently poking fun at customers’ pretensions and foibles. But the business has struggled during the pandemic and the rampant inflation that followed.
Behind those problems, which affected the retail sector as a whole, department stores seemed to lose their charm when faced with stiff competition online and elsewhere on the high street.
John Lewis, the UK’s largest employee-owned operation with 74,000 members, has abandoned its policy of ‘never knowingly underestimating’, a move that would once have been sacrilege. Even his wealthy clients have a harder time.
“The Bank of England wants to make people feel a little more pessimistic so they spend less, and it’s working,” Kankiwala says flatly.
‘If you look at past booms and busts, sometimes it goes too far and we lean towards recession. The trick is to avoid that. But that’s for the bank. I just run stores.
He says Anyday, John Lewis’ ‘entry-level brand’ for home and fashion, has ‘grown significantly’ as has the Waitrose Essentials label.
It is also considering offering Klarna-style installment payments, which are often associated with low-income consumers. “I think we will develop a buy now, pay later product,” he says. “Especially in the younger generation, people expect it.”
Kankiwala, who was non-executive for two years before becoming chief executive, will work alongside president Dame Sharon White to try to restore the association’s place in the hearts of the nation.
They have their work cut out. Losses last year were £234m and partners have been bonus-free for three years in a row.
The hope is that the installation of Kankiwala as the first chief executive of John Lewis and Waitrose will spur the revival. Previously, the two chains had separate bosses, each reporting to the president.
“We’ve never had a CEO,” says Kankiwala. ‘In the old days we had two of everything. We have brought all the functions together and they all report to me now.’
Kankiwala’s task is to implement the recovery strategy, called the Partnership Plan, drawn up by White three years ago. The five-year plan aims to reduce costs, improve service and expand into areas such as financial services and high-quality rental housing.
The aim is to make £200m of profit over the next two years and £400m by 2025. Along the way, White has pledged to recoup partner bonuses when profits reach £150m. and the debt decreases.
But given the downturn in the economy since the plan was launched, is it still realistic?
“We’re halfway there,” he says. ‘We’ve had the cost of living, rising utility bills and an additional £180m cost.
‘It means we have to push ourselves even harder in some areas of the plan where I can bring my skills to play. Number one: I’m customer obsessed. Growing up like I did, I can think of a thousand examples of learning from customers because they tell you the truth, even if you don’t like it.
‘Number two is the cost. With all the added expenses that come from doing business, we really have to make sure we are as productive as possible. In some areas we are not as efficient as other retailers. We have to look at waste and the supply chain.
‘The third area that we need to promote is technology. We have not invested as quickly as we should.
Despite three years of losses, he believes he can still hit profit targets. “Broadly speaking, I think it will be achieved by eliminating more costs,” she says.
‘When the previous team did the work, their assumption on inflation was around 3 per cent. We have already shelled out £300 million. This year we’ll probably get £100m out.
‘In acquisitions, we can do better. But we want to do it sustainably, not just cut down.’
John Lewis has closed 16 stores since the pandemic, leading to more than 2,000 layoffs. And nine Waitrose stores have been closed, leading to the loss of more than 500 jobs. Kankiwala says there are no plans to close any more stores.
When White spoke in March about the possibility that there could be further implications for jobs, he was referring to natural turnover. Layoffs are not expected.
As for the reinstatement of bonuses, he says that staff are more concerned with higher base salaries. The partners have been promised they will be paid at least the actual living wage of £10.90 an hour, or £11.95 in London, once profits top £200m. Clients may be surprised that this was not the case.
There have been suggestions that John Lewis’s situation had become so dire that White was prepared to dismantle the partnership model to attract new investment. Kankiwala, however, insists that the society is safe in his hands.
Kankiwala spent most of his career in the mainstream corporate sector, including Pepsico and Burger King. His most recent assignment was in Hovis, where he negotiated a sale to private equity.
Takeover moguls have a realistic approach to business that is contrary to corporate ethics. So is he really married to it?
“I am,” he insists. “I sincerely feel the partnership model is better and will be replicated elsewhere.”
Sadly his parents have passed away and they are not here to see their son take on one of the biggest jobs in British retail.
“My mom and dad would be so proud,” he says. ‘When I was selling clothes in the market, we were poor. I am very privileged to be here because I come from nothing. My sister is in India and she was telling me, ‘Now you have a great store.’
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