Retail therapy

In fact, its status as the one of the most ambitious retail makeovers ever seemed assured last month when Selfridges dropped its £300m, Foster-designed redevelopment plans for its flagship Oxford Street site, in favour of a £20m nationwide refurbishment programme.

But why would the John Lewis Partnership commit £107m to an existing asset when they could have purchased several new stores elsewhere for the same amount? Put simply, the building was worth it.

Chelsea residents are some of the richest in the country and since 1900, Peter Jones has been their corner shop. They bought their school uniforms there. They shopped for 21st birthday bashes there. Now it is their children and grandchildren jostling to park the Range Rover. These people dig deep into their Prada handbags, too, so even though footfall is relatively light, Peter Jones's annual turnover, prior to the refurbishment, was second only to Oxford Street's John Lewis.

The symbolic value of Peter Jones is immense as well. Within the John Lewis group it's known as the "Cradle of the Partnership". In 1877 the young Welshman Peter Jones opened his store and began the tradition of treating staff well, providing living accommodation above the shop. John Lewis, of Oxford Street fame, bought him out in 1905. His son Spedan Lewis started profit sharing after he took over the business in 1914. Evidence of the company's early attitude to employees were found when the project team discovered a theatre, squash courts and a swimming pool (empty, of course) upstairs in the old building.

It is also significant architecturally. The facade looks slightly retro now, but the 1930s curving glass and steel frontage was Britain's first example of curtain walling. But by 1995 the cradle of the partnership was showing distinct signs of wear: squeaky floors, carpets sellotaped down, fans blowing everywhere to make up for the lack of air conditioning. "It was like visiting an old auntie's house," said Beverley Aspinall, store managing director, adding that this lived-in atmosphere made the loyal clientele feel at home.

But under the surface it was more serious. The essential services were in a state of decrepitude. Installed in the 1930s the heating, plumbing, wiring and fire sprinkling systems were shot. "We were limping from day to day waiting for the time when we'd have to close," said Aspinall.

'We apologise for the inconvenience...'
Clearly it was time to act. The owner, the John Lewis Partnership, engaged Davis Langdon in 1996 to work up a cost model. They set upon doing the work over five years, keeping at least two thirds of the store open at all times. It was a long, expensive and complex programme on an island site in a busy urban district.

They considered other options, like shutting the store and finishing in half the time. But while that may have been easier for the contractors, it would have meant making 1500 "partners" redundant (that's what John Lewis calls its employees). They also felt that if they shut, they might as well stay shut. Deprived of Peter Jones, these loyal big spenders would have been tempted to find another corner store. "We discounted this option very quickly," said Aspinall.

Having decided to keep the store open, the next question was how open? One early plan involved more than 100 phases, but the scale of the work was so profound that that would have been unworkable. "It was more open-heart surgery than refurbishment," said a spokesman for Bovis, the construction manager.

So they decided on three big phases, which would see a third of the trading space removed at any one time. Even though the John Lewis Partnership used a warehouse in the vicinity for extra retail space, there was a significant drop in revenue throughout the five years, broadly reflecting the amount of floor space rendered unusable.

It was a courageous move for a client, possible only because, as a private firm, the John Lewis Partnership can take a longer view about investing millions. It will need to capitalise on the fact that, apart from getting a building that works and a flashy new interior, Peter Jones has 20% more floor space. Aspinall predicts a full revenue recovery to second place behind John Lewis on Oxford Street.

If the John Lewis Partnership can be credited with a full-blooded embrace of a major construction challenge, so can Beverley Aspinall. She'd been working with the Partnership 10 years when she became MD of Peter Jones, thus inheriting the looming spectre of the refurbishment. Given the choice of directing the project herself or having a more experienced project manager from the Partnership parachuted in, she chose to do it herself. But her first project meeting was a bit of a shock.

"Everybody was a bit macho and aggressive," she said. But soon the two cultures rubbed off on each other. "They became more negotiable and we became less afraid of upsetting people," she said.

For a dedicated retailer (and shopper), Aspinall admits that spending £107m has been the most glorious shopping spree of her life.