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Bestseller’s Australia country director Rikke Dahl-Thorup told Inside Retail that the brand entered the Australian market due to the strong consumer demand for Scandinavian design, and a willingness from Aussie customers to embrace new trends.

Following the group’s entry, Dahl-Thorup said that it had experienced rapid growth across the Australia and New Zealand region due to its strong partnership with key wholesale partners.

“One example of this is the recent expansion of Vero Moda. Since launching the brand in 2018 in Australia and New Zealand, we’ve seen over 200 per cent increase in sales. [It] is regarded as one of the consistently top performing brands amongst our wholesale accounts,” Dahl-Thorup said.

“This reflects the growing demand for good quality fashion at competitive prices.”

She believes that Bestseller’s partnerships with Myer and David Jones had been particularly significant in Australia, due to the department stores’ size and strong reputation. Dahl-Thorup noted that the group leveraged these partnerships to introduce its brand to a wider audience, and increase its visibility: something it has also achieved through its partnership with The Iconic.

“Our wholesale channel is an essential part of our business and remains a key focus and strength for Bestseller in Australia,” Dahl-Thorup said.

Meanwhile, amid rising cost of living pressures, Dahl-Thorup explained that Bestseller’s pricing strategy aims to provide consumers with high quality fashion at affordable prices. She contended that this strategy would ensure the financial stability of Bestseller, as well as the group’s partners.

“One key aspect of this is our focus on efficiency. [We] work closely with our suppliers and partners to ensure this, while maintaining high quality standards,” she said.

“This helps to minimise the impact of rising costs on the final price of the product.”

Progress with a way to go

Throughout its global expansion, Dahl-Thorup believes that the group has maintained a Danish sensibility in its design aesthetic and corporate culture. This is reflected in the company’s commitment to sustainability and ethical product practices, which she said are deeply ingrained in Danish culture.

She explained that the group has upheld these practices by working to counter climate change, using resources efficiently and promoting human rights. According to Dahl-Thorup, Bestseller has reduced emissions by over 80 per cent, with all energy consumption in Bestseller owned and operated buildings in Europe being driven by solar power from 2021.

Other Bestseller sustainability initiatives include teaming up with shipping company Maersk, which transports its products with ships powered by low-emission biofuel.

“With this, we avoid more than 36,000 tonnes CO2 of potential emissions, compared to using traditional fossil-fuel based transport. Without this, our total logistics emissions in 2021-2022 would have been 20 percent higher,” Dahl-Thorup said.

The group claimed to have intensified its focus on indirect emissions via the extended value chain. It has committed to establishing solar power plants at textile factories in Bangladesh, which would integrate renewable energy into the production of its goods.

Bestseller’s has also invested more that 100 million DKK (about AUD$21.5 million) into Invest Fwd – the group’s investment arm dedicated to paving a more sustainable fashion.

“Materials and productions constitute the biggest emissions and biggest challenge for the fashion industry,” she said.

“So, with Invest Fwd, we believe that one of the solutions to lasting changes is innovation. We focus on new low-impact materials, regenerative production, new circular business models and smarter ways of manufacturing.

“We are seeing great progress, but we still have a long way to go.”

Moving as an industry

Bestseller subscribes to the philosophies of being ‘climate positive,’ ‘fair for all,’ and ‘circular by design.’ 

According to Dahl-Thorup, Bestseller is seeking to meet these ambitions by tracking and reducing its greenhouse gas emissions, and establishing and making progress toward goals that have been approved by the Science Based Targets Initiative.

Dahl-Thorup added that Bestsellers is also working with stakeholders, partners and the industry to increase its transparency and traceability across its supply chain.

“Since 2018, we’ve been a strategic partner in Fashion for Good – a global community of brands, producers, retailers, suppliers, NGOs, innovators and investors united around shared ambitions of positively transforming the fashion industry,” she said.

“Our Fashion FWD strategy continues its course and focus is very much on data, legislation and standards, so that we ensure that we move as an industry and not just individual companies.”

Could breaking the staff-ownership model be the answer for the owner of John Lewis and Waitrose, which is considering bringing in outside investment of up to £2bn as a way to secure its future after reporting hefty losses?

The John Lewis Partnership has been owned by its employees since the 1920s, meaning they receive an annual bonus based on profits in a set-up that motivated staff and helped it expand into a stalwart of the British high street.

The model was so successful that just a decade ago the then deputy prime minister, Nick Clegg, was hailing it as a template for a future “John Lewis economy” in which workers took stakes in the firms that employ them.

However, hefty losses of £234m in the past year – despite £12bn of sales – have diminished its resources, forcing JLP to scrap its staff bonus this year for only the second time since 1953.

Its chair, Sharon White, is looking for innovative ways to raise funds to turn around and develop the business, but under its current model cannot issue new shares to investors to raise money without a big change to its constitution – and its image.

White believes the group’s retail arm can no longer sustain the profit levels sufficient to pay a regular bonus to employees and so wants capital to expand into financial services and build to rent above Waitrose stores.

Currently the business has a fairly strong balance sheet with £1bn of cash and short-term investments, and undrawn bank facilities of £420m. It has net debt of £1.7bn, led by lease obligations. Only £50m of that must be paid off short term – in December this year – and a further £300m in January 2025.

However, with debt markets currently tight, particularly for consumer-facing businesses, the partnership is heavily reliant on its own cash resources to invest and meet its obligations.

Richard Hyman, the veteran retail analyst, says that JLP’s consideration of selling a stake is “being done from a position of growing weakness”. He suggests that losing staff owned status would be a “big, big price to pay” and potentially the thin end of a wedge that could cost John Lewis and Waitrose their crucial point of difference over numerous rivals.

Hyman describes mutuality as an essential element of the brands that “permeates everything”. Neil Saunders, a retail analyst at GlobalData and former John Lewis employee, concurs, tweeting: “The partnership’s aim should not be to turn itself into any other old retailer. It’s already adopted a defeatist attitude to retail – assuming it has to seek profits elsewhere to survive.”

Hyman is also sceptical that White would be able to persuade JLP’s staff council, a vital part of its democratic structure, to agree to shift from 100% employee ownership.

He suggests that the £400m JLP has set aside to invest in shifting into build to rent and other new areas, would be better spent on improving its retail business – upgrading stores, IT and product to help lift sales and improving basics such as availability of products.

“Their eye is already not sufficiently on the ball and [shifting into] non-retail only take the eye more off the ball,” he says.

With better cashflows from retail, and less emphasis on potentially expensive and risky new lines of business, the partnership would have less need to raise new money.

“Something clearly needs to change,” says Nick Bubb, another independent retail analyst. He also argues that the business “needs better management” with more retail experience – questioning the appointment as chief executive last week of the former Hovis boss Nish Kankiwala – a private equity expert who has never run a British high street shop who was selected from the JLP non-executive board.

However, Bubb says he doesn’t believe ending total staff ownership would damage morale or customers’ belief in the brands and “what’s damaging morale is not making money or paying a bonus”.

John Lewis has suggested that it could find ways of handing over a minority stake in return for investment without the group losing its mutual status.

The Employee Ownership Association said that some staff-owned models do allow minority shareholders – for example for founders such as Guy Singh-Watson at Riverford Organics. A spokesperson said that employee-owned businesses were “often at a disadvantage to traditional models when it comes to access to capital” and some “simple tweaks to UK legislation” could improve that.

There are several potential models around the world which allow mutuals to access “patient capital”, rather than turning to hedge funds or private equity which are led by more short-term gains of three to five years, aims rather at odds with businesses such as JLP.

In the UK, the government-owned development bank created British Patient Capital which has a £2.5bn investment programme including over 1,000 companies including the Dementia Discovery Fund and Advent Life Sciences, which invests in drug research but also LoveCrafts, an online craft supplies marketplace.

Whether such funds would consider investing in an ageing retailer is another question.

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// John Lewis faces backlash from MPs and industry experts over its plans to dilute the 100% staff-owned model

// Chair Sharon White is said to be exploring the possibility of selling a minority stake in the Partnership model to raise cash

Plans to dilute John Lewis’ 100% staff-owned model has faced criticism from Labour shadow trade minister Gareth Thomas and fellow industry experts.

Chairwoman Sharon White is understood to be exploring the possibility of selling a minority stake in the Partnership model to raise between £1bn and £2bn.

The Sunday Times reported the department store retailer was in the early stages of exploring a sale which would mean a change to the John Lewis constitution and would have to be voted on by its partnership council, made up of around 60 staff.

The news comes as the retail giant announced it would be cutting jobs and scrapping its partner bonus after swinging to a £234m annual loss.

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Thomas described the proposal as “very worrying” and reflected the country’s failure to expand the “permanent capital” model that British building societies can use to raise funds.

The MP for Harrow West posted on Twitter: “Mutuals shouldn’t have to stop being mutuals to be able to access the cash they need to expand, modernise or offer new services.”

Former PwC chief economist John Hawksworth tweeted the move away from 100% employee-owned was a “terribly short-sighted idea”.

“Demutualisation destroyed the building societies that tried it and would probably do the same for John Lewis, once the epitome of the good employer in the UK consumer services sector.

“Of course they face challenges but this is the wrong road to take.”

Former House of Fraser general manager turned leadership coach James Carpenter said: “The partnership model is and has been its unique selling point, however if the model longer term is not fully sustainable then they are right to explore different options.

“What is key though for me is how they are communicating these messages to the teams, involving them on the future of the business and what the options are to make sure the partnership is there for years to come.”

The Partnership appointed Nish Kankiwala as its first ever chief executive last week in a move to help the business “thrive for another century”.

Commenting on the possible sale of a stake in the Partnership, John Lewis said: “We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans.

“We’ve done this with [online grocer] Ocado in the past and now with [housing partner] Abrdn. Our partners, who own the business, will be the first to hear about any developments.”

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// Amazon to cut another 9,000 jobs across the company

// The redundancies follow the 18,000 job cuts the business announced in January

Amazon will cut another 9,000 jobs across the company’s cloud services, advertising and Twitch units.

The redundancies follow the 18,000 job cuts the business announced in January.

Amazon CEO Andy Jassy said “uncertain economic conditions” were behind the decision.

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“As we’ve just concluded the second phase of our operating plan this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks – mostly in AWS, PXT, Advertising, and Twitch,” Jassy said.

“This was a difficult decision, but one that we think is best for the company long term.

“To those ultimately impacted by these reductions, I want to thank you for the work you have done on behalf of customers and the company.

“It’s never easy to say goodbye to our teammates, and you will be missed.”

Amazon also revealed separate plans to shut three UK warehouses and seven delivery stations in January, affecting more than 1,200 further jobs.