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John Lewis Partnership considers changing its structure to enable new outside investment, reports suggest

John Lewis' Edinburgh store. Image courtesy of the John Lewis Partnership

John Lewis and Waitrose owner the John Lewis Partnership is reported to be considering changing its ownership structure so that it can bring in external investment in the business for the first time. By doing so, the retail group would be able to invest further in its ongoing transformation plan, which aims to equip it for a digital-first future. 

At the moment John Lewis Partnership (JLP) is fully owned by its staff – who are all partners in the mutually-owned partnership business. But, The Sunday Times reports, JLP chair Sharon White is in the early stages of looking at how the retailer’s mutual structure might change so that it can raise between £1bn and £2bn in new outside investment.

A John Lewis spokesperson says: “We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans. We’ve done this with Ocado in the past and now with abrdn. Our Partners, who own the business, will be the first to hear about any developments.”

JLP unveiled in full year results last week a new £500m partnership with abrdn for its ‘build to rent’ property services business. It also previously built its ecommerce grocery business in partnership with Ocado before Waitrose then moved to strengthen its business alone. 

The reports come days after JLP posted a loss before tax and exceptional items of £78m on full-year sales of £12.25bn (+2% year-on-year) in the year to January 28 2023. After one-off costs, mostly related to property write downs, it reported a bottom line pre-tax loss of £234m. The busiest now aims to step up its transformation plan, now in its third year, as it looks to modernise the business. White said at the time: “The mantra for the year is cost out, margins up and customer focus.”

Transformation update

John Lewis’ transformation plan was first outlined in 2020, when it envisaged a digital-first strategy for a world in which 60% of John Lewis sales, and 20% of Waitrose’s, were made online. But since then, said JLP in its figures last week, the shift online was partly reversed, as supermarket shoppers bought more from the discounters and less online. In its latest financial year, about 14% of Waitrose sales were made online, down from 23% in 2021, while, 59% of John Lewis sales were online at a time when its store network has reduced to 34 stores from 51 pre-pandemic.

Last week the partnership also appointed a chief executive for the first time, bringing in Nish Kankiwala, previously a non-executive director on the JLP board, to drive its transformation plan with a focus on both performance and profitability.

John Lewis and Waitrose are both ranked Top100 in RXUK Top500 research.

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