John Lewis may end 100% staff ownership to raise investment for ‘transformation’ as job losses loom | Business News

Retail giant John Lewis could dilute 100% employee ownership to raise new capital.

The change to the partnership model will signal an important first step for companyoperates the chain of department stores and supermarkets Waitrose.

The firm job cuts warning and told staff it would not award bonuses for the second time since 1953 this week after announcing an annual loss of £234 million due to soaring costs and falling sales.

Dame Sharon White, its chairman, is in the early stages of exploring plans to change its general structure in an attempt to raise up to £2 billion in new investment, according to The Sunday Times.

The group will consider selling only a minority stake and its priority is to maintain majority ownership of employees, the newspaper said.

Any move would have to be voted on by the retailer’s partner council of about 60 employees.

Faced with difficult trading conditions, the company has sought to diversify its operations, including moving into the “build-to-let” real estate business.

At the end of last year it signed a contract worth 500 million pounds with Abrdn, a global investment firm, will help them build 1,000 new homes.

“We’ve always said we’ll be looking for partnerships to help fund our exciting and transformative growth plans,” said John Lewis Partnership.

“We’ve done this with Ocado in the past and now with Abrdn.

“Our partners, who own the business, will be the first to know about any developments.”

The UK’s largest employee-owned business

The business was founded by John Lewis with a small shop on Oxford Street in 1864.

His son, John Spedan Lewis, created the partnership more than 70 years ago as an experiment in how to do business better by involving employees in the decision-making process.

The John Lewis Partnership is the UK’s largest employee-owned business with around 74,000 employees, so-called partners.

The group has 34 John Lewis stores and 329 Waitrose stores, along with its retail websites.

In a letter to employees last week, Dame Sharon raised the specter of job loss as part of an effort “to become more efficient and productive”.

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‘Inflationary pressure’

A loss of £78m was recorded for the year ended January but when special expenses are added this comes to £234m.

These include the write-down of Waitrose stores.

It represents a drop from a profit of £181m in the previous year, with John Lewis blaming “inflationary pressures”.

The update comes a day after the team appointed turnaround specialist Nish Kankiwala as its first chief executive officer, in a leadership restructuring.