John Lewis is to shed a third of its senior executives in a merger of the management of its department stores and Waitrose supermarket chain.
The move to scrap the separate teams will see the current managing director of Waitrose Rob Collins step down after 26 years with the group.
Under the shake-up, the John Lewis Partnership will cut around 75 of its 225 senior management head office roles, which will save £100m “over time”.
However, John Lewis managing director Paula Nickolds will stay with the company, taking on the newly created role of executive director for brand from next year.
The outgoing chairman of John Lewis, Sir Charlie Mayfield, said the business needed to take “bolder steps” to turn around its fortunes in a tough retail environment.
He said: “Although there will be little or no disruption to our shops or websites in the near term, there will be considerable change in many other areas of the partnership as we bring the two businesses much closer together.
“These are necessary and these changes will be difficult for some of our partners and we will implement as carefully and sensitively as we can.”
He added: “We are confident, as a board, that when the programme is complete, the partnership will be better positioned to break out from the cycle of declining returns that are affecting most established retailers.”
The revamp, dubbed the Future Partnership, will see a slimmed down executive team, made up of seven new director roles with responsibilities across the whole group.
As well as reducing costs, John Lewis said the move will also make it more responsive and speed up decision making, allow the two brands to work more closely together and improve its systems by merging IT and supply chain platforms.
Mr Collins said he had been “closely involved” with the overhaul and was “very confident that the new structure is the right one for the future”.
But he added: “There isn’t a role in the new structure that I believe is right for me personally, and so I have decided to leave at the end of January.”
Details of the plan comes less than a month after John Lewis posted to its first-ever half year loss.
It reported underlying losses before tax and staff bonuses of £25.9m for the six months to 27 July, against profits of £800,000 a year earlier.
Like-for-like sales fell 2.3% across the department stores due largely to weaker demand for big-ticket home and electrical items.
Waitrose performed better, with underlying earnings increasing 14.7% to £110.1m, though comparable sales edged 0.4% lower.