THE deep-seated challenges facing the John Lewis Partnership, revealed in its latest financial results, demonstrate emphatically that this is a crisis like no other the high street has faced.

For the company, once almost a byword for churning out profits and paying bonuses to its employee owners, is proving to be no less vulnerable to the coronavirus crisis than other retailers.

John Lewis, owner of the eponymous department stores and Waitrose supermarket chain, reported a £635 million loss for the six months ended July 25. The reversal included an eye-watering write-down of £470m on the value of its John Lewis store estate, a reflection of the lessening importance of bricks-and-mortar outlets – and growing significance of online sales – to the business.

To make matters worse for the company’s 80,000 employee owners, chairman Dame Sharon White broke the news that there will be no staff bonus next year. It will be the first time in 57 years that the bonus will not be paid, and there are no guarantees as to when the next one will be distributed, with the company stating that will hinge on its performance against specific profit and debt-reduction targets.

That such a darling of the high street as John Lewis finds itself in this predicament serves to highlight the profound difficulty UK retail finds itself in after a bruising year, in which the headwinds it was facing at the start of the year have been exacerbated by the coronavirus crisis.

The steady drift to online shopping that was well in train was turbo-charged during lockdown, while rental levels on high streets and malls that were already proving to be too rich for so many retailers now seem even more problematic, given the downturn in shopper numbers we have seen because of Covid-19. That is evidenced by the clamour by a host of big-name retailers to secure company voluntary arrangements (CVAs) with creditors – effectively a form of insolvency process – in a bid to cut overheads.

Glasgow-based Quiz, the fashion retailer, took a different form of insolvency route to reduce its cost base amid the fall in consumer spending. A “pre-pack” deal announced in July saw Kast, a wholly owned subsidiary of the company that operated 82 Quiz stores in the UK and Ireland, move into administration, before the business and certain of its assets were acquired by Zandra, another Quiz subsidiary, for £1.3m later that day.

The move ultimately resulted in Quiz closing 11 of the 82 stores, shedding more than 90 jobs in the process. Quiz then revealed earlier this month that it will close a further 15 stores.

Such developments illustrate that running shops is a costly business, and do not bode well for those looking for glimmers of hope that the high street can recover from the Covid crisis.

Yet there are experts who believe that, to adapt a well-worn phrase, rumours of the death of the high street are greatly exaggerated. That optimism was in abundant supply during an online conference hosted by The Herald last week, when a range of stakeholders highlighted what they see as the opportunities still offered to the high street in spite of the current predicament.

The shift to working from home, which following Tuesday’s U-turn is again being encouraged by the UK Government to suppress the resurgent coronavirus, has helped many businesses in local communities thrive, the conference heard. And it was felt there was a desire among people to continue supporting local firms, with lockdown having caused many of us to stop and think about how and where we spend our money.

There was widespread acknowledgement among the panel that there is an excess of retail space in town centres and high streets, but equally a sense that it can be repurposed.

Although the move to online shopping has been accelerated by the coronavirus in recent months, none of the speakers predicted digital sales will ultimately spell the end for bricks-and-mortar shops. Instead, it was argued, we will see the continuing rise of omni-channel retailing, where physical stores will increasingly be used as showrooms or click and collect locations.

A similar point was made to me this week by Paul Miller, co-founder of the Fife-based distiller Eden Mill, when discussing the firm’s plans to open a string of seasonal pop-up stores throughout Scotland in the coming weeks. As far as he is concerned, there will always be a desire among consumers to take a closer look at products before they buy. Drawing a parallel with the experience offered by tech giant Apple in its boutiques, Mr Miller said: “What is coming through really clearly is that people still like the idea of going out and touching and feeling and tasting our products, so the opportunity to get those out to an environment where people can feel comfortable is really important for us. Even if, ultimately, they buy in the shop or online it almost really is not that important. What is important is they have a really good experience when they come to one of our pop-up shops, and get another extra layer of texture around what the brand is about.”

Of course, while it is important to accentuate the positives, it would be naïve to suggest the retail sector is not facing a tough slog in the months ahead.

The task of regenerating towns and city centres that in recent years have been left behind by the development of out-of-town shopping malls will require heavy investment and collaborative thinking (though positive examples are emerging, such as the new Paisley town centre masterplan). And consumer confidence is unlikely to improve any time soon, with the end of the furlough scheme expected to bring many thousands of more redundancies unless there is some form of extension. Indeed, the coronavirus crisis has already exerted a heavy toll on the retail sector. In her keynote address to The Future of Our High Streets conference, Vivienne King of retail consultant Revo said 43,000 jobs and 5,500 stores have already gone since the pandemic took hold, and it seems inevitable there will be more bad news on this front.

Smart retailers have shown great flexibility throughout the pandemic, and of course have invested heavily to ensure the public can navigate their stores in a socially distant and hygienic fashion. They will have to continue drawing on their reserves of creativity to survive in the difficult months ahead.

But they also need the backing of supportive government, and a willingness for taxation and policy to be adapted to suit the reality of the trading environment the retail industry now finds itself in.