Sir Stuart Hampson

First among 63,000 equal partners, the chairman of the egalitarian retailer John Lewis is a donnish ex-civil servant.

by Chris Blackhurst
Last Updated: 31 Aug 2010

The view from Sir Stuart Hampson's office window in central London stretches down Victoria Street, past the Department of Trade and Industry to Big Ben and Westminster. As work vistas go, it's pretty spectacular. It's also appropriate for someone who used to be a civil servant and is now, as chairman of John Lewis, one of Britain's most successful retailers. That is a journey rarely made, from down there to up here. Plenty of senior mandarins quit to try their hand at the top of business, but that's usually at the end of their career and, often, what they quit for is little more than a sinecure intended to exploit their Whitehall contacts.

Hampson was different. He threw the lot in to start again as a trainee store manager. As life-changes go, it was remarkable. But then Hampson is quite unlike any high-street Titan I've met.

There are the brash, swaggering types - born negotiators and sellers, like Philip Green. Then there is the quieter, intensely committed, fiercely driven sort, such as Sir Terry Leahy.

Hampson is neither. He has the studious air of a fellow of All Souls, the manner of a patrician boys' public school headmaster. It's easy to imagine him engaging in erudite high-table conversation or discussing university options with a sixth-former. It's more difficult to think of him mixing it with the Greens and the Leahys.

But John Lewis is not your typical corporation, retail or otherwise. Famously, it's a partnership where the 63,000 employees of the John Lewis department stores and Waitrose supermarkets all share the profits of the business and have a say in how it's run. Its workers aren't 'staff' but 'partners'.

It's also, as a result, a more egalitarian, caring place. On the way to see Hampson, for instance, it's impossible to miss all the signs pointing to the partners' restaurant, counselling and other facilities. The in-house newspaper, the Gazette, contains letters to the management from partners sounding off in a way that other organisations might not tolerate. Staff get a 12%-25% discount on goods they buy. The pension scheme is non-contributory. They can avail themselves of offers galore, for holidays and theatre tickets. There are numerous leisure and sports societies. And after 25 years' service they are entitled to six months' paid leave.

The John Lewis Partnership - or JLP, as it's referred to internally - occupies a unique place in British society. It prides itself on being understated, in sharp contrast to glitzy, loud companies. But it's also on the button as well, embraced as a fine example of a stakeholder concern, given the ultimate accolade by no less a moderniser than Allan Leighton as the ideal blueprint for his Post Office.

It has also become something of a bellwether for the economy, producing regular sales updates and acting as a vigorous campaigner in London on behalf of the retail sector against the congestion charge. It's seen as a middle-class, non-exploitative institution, like Radio 4 or the National Trust.

In many ways, John Lewis sits where Marks & Spencer did until a few years ago. It has become Middle Britain's supplier of choice, for clothes, food and household goods, not just through its 26 department stores and 166 supermarkets on the high street, but also via John Lewis Direct and Ocado (the company that sells Waitrose produce) on the internet. Solid, reassuring, dependable, with a twin emphasis on quality and value for money, the group has carved out a place all its own. The department store slogan, 'Never knowingly undersold', coined 70 years ago by John Spedan Lewis, eldest son of the John Lewis who created the partnership, is surely one of the smartest ever.

With their simple lines and absence of loud music, the stores exude orderliness and calm. The staff are older than at other retailers - a reflection of the partner ethos. They stay longer, and at the junior and middle levels they are well rewarded (last year they received a bonus payout of 14% of salary). But not at the very top. Hampson's salary last year was £626,00 plus bonus of £66,000. It sounds a lot - and causes grumbling among some partners, who would prefer to see all the staff paid the same, regardless of status and responsibility (such is the idealism that John Lewis provokes). But it is far less than his peers at other retailers. He has, don't forget, no share options coming his way. 'If you want a yacht and racehorses, don't come and work for John Lewis,' he says.

There's almost a cultish feel to the company. Within this hard-nosed industry there are those who regard it as a vast, New Age commune. According to Tyler Brulee, style guru and founder of Wallpaper* magazine, John Lewis, with its food division Waitrose, 'has become the new measure of trust and honesty'.

Lack of cynicism should not be taken as evidence of poor performance. Hampson presides over a high-achieving organisation. Profits last year rose 24% to £216 million. At John Lewis' 26 department stores, they climbed 8%, and at Waitrose's 166 outlets - boosted by the acquisition of 19 stores from Morrison's, most of them in the north of England - they rose 10%. Staff shared a record £106 million in their bonus pool, up from £87 million.

Given this stellar display, Hampson could be forgiven for lying back in his chair and puffing on a very fat cigar. But he's just not the sort. Even how you get to his office says something about his approach. John Lewis is headquartered in a drab, anonymous block. The entrance is small and functional, the lifts cramped and crowded. There is an all-pervading mood of work without frills and fuss, of quiet control and modesty.

Tall and thin, Hampson talks quickly, in clipped Home Counties tones, and has a penetrating, challenging gaze. He could, as I said, pass for a university don, or a top civil servant of the urbane Sir Humphrey kind - fast, clever, witty and extremely sharp - and the latter is what he might have become.

He was born in 1947 in Oldham, Lancashire. His father died when he was four, and he and his brother were brought up by their mother on her own. She ran a draper's shop, since demolished. Was that where he acquired the first inkling that he might be a retailer? 'I served behind the counter occasionally and helped dress the windows,' he says, 'but not really. I was too young.'

He went away, to the Royal Masonic School at Bushy, Hertfordshire. 'There were 400 boys in the school, all of whose fathers had died. They were all from one-parent families. It was a very supportive school.'

A picture of companionship but also of sadness and loneliness emerges, of a boy sent to school 200 miles away in the 1950s, without a father, having, you suspect, to look after himself much of the time and to grow up more quickly than he might otherwise have done. Nevertheless, he won a place at Oxford to read modern languages (German and French).

At the mention of Oxford he becomes more animated. It was clearly the making of him. 'I rowed. I was secretary of boats for my college and we were head of the river. I wasn't exactly good at ball skills,' he says, smiling, 'and I found something I could do very well. I loved the whole team ethos of rowing. I had a great experience at Oxford.'

When it came to choosing a job, he plumped for the civil service. 'I'd always wanted to be a civil servant, from the age of 12 - my wife says it must be a character defect. The idea of doing something that was genuinely worthwhile appealed to me. I never changed that view - the civil service supplied exactly what I'd expected, which was a series of very challenging, rewarding jobs.'

He worked in Whitehall from 1969 to 1982. He joined the Board of Trade, where he was responsible for, among other things, keeping the price of bread down - he was in charge of the subsidy designed to stop the loaf going above three shillings (15p).

He also oversaw the lighthouse service, and was seconded to the Foreign Office, which sent him to Geneva. He met his wife Angela there (they have two grown-up children, Rachel and Jonathan). The couple live in Buckinghamshire. When he's not running John Lewis, he plays golf, drives a 50-year-old Jaguar and listens to classical music, especially opera.

Earmarked for promotion, he became private secretary successively to three ministers: Roy Hattersley, John Nott and, finally, John Biffen. He was in Whitehall in 1979 when Margaret Thatcher swept in. 'I worked for Nott after the revolution, after the arrival of Thatcherism. It was a very exciting time.'

Soon the buzz gave way to disappointment. 'Thatcher ran down the civil service. We were quite excited and ready to run with her, but she spent a lot of her time being rude about us. There was a tremendous lack of financial discipline then. I remember John Nott was the minister and he wanted to know some figures. It was impossible to get an answer. People just said: "Why do you want to know?" I rebelled against the lack of financial discipline.'

Hampson started to think the unthinkable, about a change in career. 'I was coming up to 35 and I realised I'd got 25 or so years left. I'd enjoyed it so far, but I couldn't consider that the next 25 were going to be as enjoyable.'

He saw an advertisement in the Sunday Times saying that John Lewis would always consider people who were changing careers. 'I dashed off a quick CV and I found myself called for an interview with the personnel director.'

He got the job, as a trainee manager. John Lewis offered to match his senior civil servant's salary. There was a bit of him that had always fancied retailing, but even so ... 'I didn't have a clue what the job entailed. I wanted a career as good as the one I'd had with the civil service. There I was, giving up Cabinet secrets in order to sell pyjamas. But that's what I did.'

Four fellow recruits who'd changed careers started at the same time. How did they get on? 'Fine. One, David Young, retired recently as deputy chairman.'

Hampson denies he was fast-tracked to the boardroom. 'A strong statement was made that I could expect a good career, that was all. I thought I might at least end up running one of the department stores.'

Wasn't the firm taking a gamble? He doesn't come across as a natural retailer. 'A department store comprises 1,000 people. It requires multi-disciplined leadership. That's where I am, rather than sourcing textiles, say. Not everyone in the business needs to be Philip Green.'

For six weeks he worked in the Oxford Street branch as a sales assistant. 'I moved around. I literally was selling everything, from pyjamas to china and glass.' He discovered the values, he says, that make John Lewis. 'I realised what customer care and service meant. I was chatting to people who had been doing it all their days.'

He worked at Peter Jones; he was number two in lighting in Watford. Just18 months after joining, he got his own store in Southampton. Was it a fast rise? 'It might have been, but I'd done all the jobs, even if it was only for a few weeks, so that gave me credibility.'

It was, nevertheless, a huge leap from the comfort of Whitehall to Southampton city centre. 'As a civil servant, I had good analytical skills and a sense of balance - I realised there was not always one side to any argument. But I was glad to be rid of the paper trail and the use of acronyms. I enjoyed having authority; I wasn't advising ministers but doing it myself. That's much more satisfying than advising ministers and hoping they get it right.'

He had three happy years in Southampton before he was appointed to the board, as the quirkily titled director of research and expansion. It was a steep ascent. 'As head of a branch in those days I was visible enough to go to the main board. Now we have two management boards. Back then we didn't, we were a small business. Things were less tough than they are now.'

His brief was to find new locations for John Lewis stores. Opening a new John Lewis, he is keen to point out, is not like opening any other store. They tend to be central (John Lewis has remained committed to the old high street concept) and extremely large. They sell 500,000 different lines.

They take years to plan and build. 'Kingston council wanted a John Lewis. It took 16 years to negotiate and to open. Last week, we announced we're opening on a new site in Leeds. In 1986, when I started my job as director of expansion, one of the first places I looked at was Leeds. Now we've got a site for a department store and a Waitrose on the northern ring road in the city. They will open in 2011, so that's 25 years after we talked about it.'

His target for John Lewis is a 50% increase in sales space by 2010 - effectively opening 10 new stores. For Waitrose, his aim is 350 branches.

One aspect of Hampson's chairmanship (he acceded to the title in 1993) has been the growth of superior supermarket chain Waitrose. He resents people saying they're too expensive and elitist. 'Our competitors chase each other on price and formats. We are in competition with them on price - we are - but our shops are smaller and have a more manageable feel, which our customers love. Listen, a pint of milk in Waitrose is the same as in Tesco. Known value items are the same. Sure, our tinned tomatoes will be more expensive than our competitors', but if you get them out and taste them, ours will taste better, we believe. We're offering value and quality.'

Once he starts on Waitrose and its perceived snobbishness, there is no stopping him. 'It's all about choice. We appeal to people who really care about food. We're a niche player. We want to be different to everybody else. The bigger you get, the harder it is to occupy a distinctive position in the field.'

A point of distinction, he says, is that 'Waitrose's relationships with its suppliers are different. Half our suppliers are family businesses. They can offer us products that aren't found elsewhere because they're small.' The paternalistic approach extends to them as well, so they don't suddenly find their terms are altered or they're dropped. Waitrose values them just as it does the customers and employees.

Does he check up on the opposition? 'When I go to a Waitrose I go to the competition nearby. I like to think, though, that we go in the opposite direction. If all you're doing is copying what the others do, why would anyone want to go to your shop? It's about distinctiveness. We like to say there are a hundred things that make Waitrose Waitrose.'

Does he go in for all the macho stuff beloved of some supermarket chiefs, of working behind the counters? 'There's a belief that if you serve at the till you will discover something you didn't know before. It's overdone, because it's so artificial. I talk to the partners, it's so much quicker.'

There's an air of superiority about John Lewis. Hampson really does see himself and his colleagues as being above the fray of a public company, of being quite apart from the rest. So would JLP ever become JLplc? 'No. We looked at it in the summer of 1999, when the 40,000 partners then would have got £100,000 each - and it was rejected.'

It says something that in this age of shorttermism and me, me, me, a bunch of people said no to £100,000 apiece. Hampson is under no illusion: a stock market quotation, even if the company had FTSE-100 membership, would be a disaster. 'Retail is not suited to a public listing, because we're in a quite volatile activity that is directly and instantly affected by the ups and downs of the economy.'

He has taken risks that he might not have got away with if JLP had been a stock market firm, with the City constantly seeking a return. He pumped £100 million into Peter Jones in London's Sloane Square ('the best department store in Europe'), he refurbished the Edinburgh and Nottingham John Lewises, he invested in Ocado and he made a major commitment to John Lewis Direct. 'They all had a negative impact on the p & l. If I was a CEO driven by how the City sees me and my share options, it would have been very visible to duck on them.'

If John Lewis had not invested in the internet, nobody would have noticed. But with John Lewis Direct and Ocado he did, and although profits have yet to follow, he claims them both as resounding successes. 'In supermarkets, Tesco is number one and Waitrose is number eight, but in online home delivery, Tesco is still number one and Ocado is number two.'

Still, Ocado seems a long way from profit. 'It's a slow grind but it's all about volume. Also, we discovered customers who were going to Tesco online even though they were Waitrose customers. We had to do something. We're a 40% investor in Ocado and a 100% supplier. The potential market is unknown, but we will have a big slice of it.'

During Hampson's tenure, John Lewis has become an industry spokesman. Does that seem out of character? 'It's true we were like Trappist monks,' he replies. 'We never spoke externally on anything; we felt we only needed to communicate internally. But as we got bigger, and as we realised customers take a real interest in what we're doing, we've spoken out.

'We've got a sense of responsibility - our customers put trust in the partnership. Even though we're employee-owned, I feel we're also owned by our customers - it's their shop. I encourage the managers to think that way. Because of the way we are, managers are free to do what they like. We've never sacked anybody for being too generous to a customer.'

He tells a story about a letter he got from one of them. She wrote to him to say how she'd gone to John Lewis to buy a Miele washing machine for her utility room. 'The assistant asked why that particular one - did she realise she was paying more because it was so quiet? She said: no, she did not. She didn't need one so quiet, so she ended up buying a cheaper one. In the letter, she said she had never known an assistant anywhere not try to sell her something more expensive. It was marvellous and summed up what we're about.

'We talk about relationships, others talk about transactions. They aim to maximise transactions; we aim to build relationships. In the end, the business that focuses on relationships will beat the one that focuses on transactions.'

In many respects, Hampson is not like the other kings of the high street. But then John Lewis is not like any other retailer.

THREE CHALLENGES FACING HAMPSON

1 To maintain the reality of shared ownership in a business that continues to grow

2 To keep the distinctive character of John Lewis and Waitrose, when imitation and commoditisation are doing the rounds

3 To respond to the economic trend of people moving from wanting things to wanting experiences

HAMPSON IN A MINUTE

1947 Born 7 January. Educated at Royal Masonic School, Bushey, and St

John's College, Oxford University

1969 Civil servant, Board of Trade

1972 Seconded to Foreign Office, sent to UN, serving in Geneva

1974 Department of Prices and Consumer Protection, private secretary to

Roy Hattersley

1979 Department of Trade, private secretary to John Biffen and then John

Nott

1982 Trainee manager, John Lewis Partnership

1986 Appointed director of research and expansion, John Lewis

1993 Chairman, John Lewis

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