It has been reported by The Times that John Lewis Partnership is considering an outside investor to help to finance and launch a joint venture focused on services rather than retail to reduce its reliance on retailing.
It was also reported that the company may be contemplating the possibility of never reopening of some of its less profitable department stores once the coronavirus lockdown is lifted.
The Times reported that the group’s chairwoman Dame Sharon White is behind these plans and hopes to introduce further strategic changes in response to the pandemic.
White has already spoken of her intention to step up the partnership’s services business as physical store sales drop thanks to a shift in shopping habits to online.
However, any plan to raise capital by inviting an investor to buy a stake directly in the group is regarded as impractical because it is owned by a trust on behalf of employees. If plans were to go ahead, it would dilute employees’ stake.
The Times reported that the chairwoman is also exploring whether the partnership should keep all John Lewis stores open as part of plans to “right-size” the retailer’s store estate. And the company is also reviewing whether it can shrink space by handing back a floor in some of its larger stores to landlords.
This news comes after it was revealed last week that while Waitrose’s overall sales were up eight per cent since 26 January, the impact of store closures saw John Lewis’ total sales fall 17 per cent since mid-March, in spite of the fact that John Lewis online sales were up 84 per cent in the same period.
With all 50 John Lewis stores having been closed since March 23, The John Lewis Partnership also confirmed last week that 14,000 staff had been furloughed across the business due to the lockdown, but that they would receive full contractual pay until the end of May.
Last week, the retailer also revealed that it paid out £939,773 to its former managing director Paula Nickolds, who exited in January following lacklustre Christmas sales. The pay-out was in respect of her notice period, contributions to her legal fees and career development support.