John Lewis considers outside investment for move into services
John Lewis is reported to be exploring the possibility of appointing an outside investor to fund a joint venture for a move into services that would reduce its reliance on retailing.
The department store partnership may also consider keeping some of its 50 stores closed for good after the COVID-19 crisis, The Times has reported.
It new chairman Dame Sharon White is said to be exploring more possibilities for a diversification of its services offer, which currently covers financial services and curtain fitting.
Having an outside investor in the partnership would be difficult since it is employee owned (and would require an act of Parliament to change the status of the trust deed it is believed), hence the idea of creating a new joint venture to focus on services.
The company has also stated that John Lewis's status as an employee-owned business is "non negotiable".
It is not yet known which services the company might expand into but it could include an expansion of its financial services offer and a move into technology services. It has recently moved to add more experiences to its stores, such as personal styling and cookery classes and during the non-essential retail lockdown it has been offering some services online.
Dame Sharon is also said to be commissioning a review of its store estate to ensure the business is "right-sized" for the future, meaning some may not re-open.
Other ideas include reducing the floor space of some or introducing more Waitrose food halls into the centre of stores.
All John Lewis stores have been closed since 23 March, however its Waitrose supermarkets and the John Lewis Food Hall on Oxford Street have remained open.
In a trading update last week Dame Sharon said the company had experienced an 84% spike in online sales since the lockdown but said that overall sales had been down 17% year on year to mid-March.
“Over the course of the full year, this worst case would result in a sales decline of around 35% in John Lewis, around double the current level, while at Waitrose it would result in a more modest decline of less than 5%,” she added.