John Lewis reinvented as 'retail theatre'

All change on Oxford Street as the mecca of sensible middle-class shoppers undergoes a multimillion-pound makeover

John Lewis, the destination for sensible shoppers seeking everything from curtain poles to tapestry kits, is about to enter the late 20th century.

John Lewis, the destination for sensible shoppers seeking everything from curtain poles to tapestry kits, is about to enter the late 20th century.

Its motto "never knowingly undersold" has not been enough to stop a profits slump, so the company is to embark on a £13m revamp of its flagship department store in London's Oxford Street. The facelift is part of the deeply traditional firm's £300m strategy to expand and modernise its 25-strong string of shops that has already seen it break a decades-old taboo by hiring high-profile image consultants.

At the end of the Nineties, Selfridges, John Lewis's Oxford Street rival a short walk away towards Marble Arch, itself underwent a radical revamp - a massive building project that was hidden by a giant, wrap-around photograph of semi-clad models by Brit Artist Sam Taylor-Wood. Things will be different at John Lewis. While other, more flashy retailers undergo facelifts as a matter of routine, the John Lewis makeover - the first major change at the branch in 40 years - has all the gravitas of a state occasion (and no nudes). According to its managing director, Peter Still, the shop will become a "retail theatre".

In a move that radically redraws the entire geo-political map of British middle-class habits, window displays are to go altogether and the stolid, puritan groupings of shoes and fridges are to give way to open views of real shoppers within. Inside, the dress fabrics department will relocate to the first floor from its ground floor home of the past 130 years, while the chrome-zone kitchenware department is set to expand into the present domain of menswear.

Meanwhile, menswear - for generations the sombre hunting ground of Sensible Man - leaps out of the basement and up to the ground floor where it will sprout "consultation rooms" and a "fashion advisory service". Women's fashion is also set for a makeover, with a new floor being built. However, in a concession to tradition, the world-renowned haberdashery department - spiritual home of the button-bereft, stained and zipless - is to remain on the ground floor.

The reorganisation, which is due to begin next month and will take 12 months to complete, spells short-term chaos for the sewing-machine classes, as around-store migration routes established for a generation or more are disrupted. But such a large-scale overhaul does mean that the store is keeping up with the neighbours.

Change has swept the length of Oxford Street in recent years. In January, 78-year-old C&A shut its doors to customers for the last time and DH Evans, on the street since 1879, is itself to undergo a £12m relaunch that will see its name replaced with that of its owner, House of Fraser. Towards Marble Arch, the Selfridges revamp - all £100m worth - has seen sales rise by up to 12 per cent, and Debenhams has also undergone a facelift that brought coffee shops on to the sales floor.

The boutique boom of the late Sixties meant that department stores had begun to experiment with new ways of selling and presentation, and Biba moved into the huge Art Deco Derry & Toms store on Kensington High Street. By the Eighties and early Nineties, old-style department stores were left foundering as a new wave of small, specialist shops and out-of-town superstores began to lure a new kind of shopper. No longer would shopping be a simple matter of buying things you happen to need: it became an event in itself.

Last year, John Lewis hired design consultancy Pentagram to carry out a comprehensive review of its entire image, from logos to packaging and the characteristic green livery used for decades to identify its goods. In Britain, Pentagram's work has included packaging for Boots, signage at Stansted airport, rebranding the Royal Institute of British Architects and a relaunch for the Guardian.

John Lewis is also talking to SRU, the image consultancy run by Peter Wallis - or style guru Peter York, as he is better known. Neither firm would discuss details of their work for John Lewis, though Mr York said that his company's role was merely to focus on one aspect of its operation. "It would be an absolute idiot who prescribed an image makeover for John Lewis," he said. "People like its image very much indeed. It is trusted. It makes you feel good, you feel comfortable there."

In the increasingly corporate, "strategy-led" retail world, John Lewis remains an oddity, but a highly successful one. The firm's origins lie in the 19th century, but it was under the guidance of John Spedan Lewis in the Twenties, Thirties and Forties that it established a uniquely democratic identity and philosophy, embraced in 1950 in the legal settlement that confirmed its status as a trust. The company adopted a shareholder system whereby all staff - known as Partners - benefit from company profits, and are paid a lump sum every spring that has ranged from 12 to 22 per cent of their annual salary.

The firm remains in the control of a trust that is itself owned by the 40,000 Partners who work both at John Lewis and its supermarket arm, Waitrose. Workers councils were set up as consultative bodies, and the entire structure of the group became suffused with chess-play- ing, insect-collecting, gibbon-breeding Spedan Lewis's vision of fair, honest and humane working conditions for all. He had no strong political or religious beliefs and the origins of his genteel business creed remain obscure, yet his system worked.

More than 30 years after his death, the firm is largely unchanged, with thriving Partners' social and cultural clubs, a non-contributory pension scheme, and a staff newspaper - The Gazette - whose letters pages are a paragon of free speech. In the age of unbridled capitalism, John Lewis is the closest thing to a workers' paradise you'll find on a British high street.

But it isn't making as much money as it used to. In the first half of last year, profits plummeted by 43 per cent to £38m. Despite increasing sales, they are expected to decline for some time as the firm splashes out on new stores - the latest of which, at Solihull, is due to open in the autumn - "rebrands" others with the John Lewis name, and completes the three-year, £80m refurbishment of its Peter Jones store on Sloane Square, west London.

In 1999, the cosy world of Spedan Lewis clashed with that of Mammon when Paul Fineman, a Partner who some came to see as the Gordon Gekko of soft furnishings, led calls for the demutualisation of the firm - a move that, it was claimed, could yield as much as £100,000 for each member of staff. Following a long and heated debate, during which it became clear that not all Partners shared the altruism of the founding father, the company survived intact - flotation, it argued, would amount to a change of the terms of the original trust, a move that would require an act of Parliament.

Further trouble looms, with management making plans to abandon its policy of closing for at least one day a week - 15 of its branches are still shut on Sundays and Mondays - so embracing the all-week opening that has become commonplace among rivals. The company had always argued that the two-day break was essential as it meant stores would not have to rely on part-time workers.

For now, the modernisers hold sway. "[The consultants] are doing relatively minor, low-key work," says Luke Mayhew, the former PR man who is now the group's managing director. "We have a very strong history and belief in who we are. We are freshening up... we want the shops more comfortable, easy to get around. We're about keeping up-to-date."

All of which will be good news to its latest high-profile devotee, the beds-to-knickers Brit-shock artist Tracy Emin. "Tracy's a regular shopper there now," her personal assistant told the IoS last week. "She loves it, she gets her material there." So in love with the squeaky-clean store is the mistress of conceptual grunge that she's applied for one of the company's credit cards, "but they phoned up the other day," the assistant added, "and asked how long she'd been self-employed. They obviously had no idea who she was."