Partners in Sales

Managers of many London department stores begin their week by checking their store's performance against the figures of the John Lewis chain of 16 stores scattered throughout Britain. What they see is usually discouraging. Only the fourth-largest company in department stores, but long the leader in profitability, John Lewis is doing better than ever.

During the past decade, while British department stores share of retail trade was shrinking, John Lewis' sales rocketed 130%, to $154 million in 1966. Sales are up another 7% and profits up 40% in the first half of this year. In household goods and dress materials no British store can match the John Lewis record for sales per square foot of space. An unusual trading policy and an even rarer company structure, in which all 17,000 employees are "partners" sharing in profits, have paid off handsomely.

From Oxford to Oxford. The chain began in 1864, when John Lewis, a buyer of silk and dress materials, opened a shop in London's Oxford Street. Legend has it that his son Spedan, while checking the books one day, found the family was earning more than the entire roster of employees. He devised a profit-sharing scheme, and in 1929 started paying "partnership benefits" to all. With no common shares issued, about half the profits are paid out annually in bonuses and nonvoting shares to em ployees, amounting to about 15% of their salaries. Through councils in each store and a company-wide central council, a dialogue is kept going between management and "partners." The company also spends some $500,000 a year on cultural subsidies (half-price tickets to Covent Garden and the Old Vic) and such perks as clubs (30, from gardening to judo) and low-cost holidays in the company-owned Brownsea Castle at Poole Harbor.

Another of Spedan Lewis' pioneering ideas was "learnership," a plan to recruit university graduates for executive training. Says the official company history: "Mr. John Lewis objected to these elegant imports almost as strongly as he objected to young women with red hair, and it became necessary when he made his periodical visitations at Oxford Street for all red-haired girls to keep out of sight and all young men with incurable Oxford accents to put on their hats and walk about pretending to be customers." But the practice survived, and the chain's present chairman, scholarly Sir Bernard Miller, 63, started in the Oxford Street store's silk department after reading modern history at Oxford University.

Refund the Difference. Sir Bernard took over in 1955, expanded operations, notably by opening 15 supermarkets, but kept to the company motto, "Never knowingly undersold." Any customer who finds an item he bought at John Lewis selling for less elsewhere can get a refund of the difference. In line with its low-price policy, John Lewis has fought retail price fixing for decades. Only last summer the company had it out with the makers of Cadbury's chocolate, and sweet-toothed Britons gleefully watched the retail price of candy crumble.

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