How to solve a problem like John Lewis? Retail experts give their views
The owner of John Lewis and Waitrose is considering selling a stake in the business to raise up to £2bn for new investment, a move that would end full employee ownership after more than 100 years.
The group, which slumped to an annual loss of £234m last year, wants money to shift into new areas including financial services and building flats to rent above some supermarkets.
We asked retail experts whether the group has the right plan.
Founder and managing director of Richer Sounds. In 2019 he transferred 60% of his shares to employees via a John Lewis-style trust
I don’t think many people today would start a chain of department stores if they had a blank piece of paper and a pile of cash. When the internet onslaught hit, Richer Sounds battened down the hatches and didn’t open any more stores but John Lewis continued to expand and it has that legacy to deal with.
I’d be worried about what sort of deal they would have to strike to get new money in unless they can find a business angel who absolutely loves John Lewis and is less worried about a financial return. I always find it is cheaper borrowing from banks. You pay a little bit over base rate, but they don’t own you.
If this was Richer Sounds we’d be listening to our people and outsiders wouldn’t be welcome.
I’d retrench. I would get rid of loss-making stores and onerous leaseholds if I could. It is important to own your stores if you possibly can.
We’d try to reduce our borrowings from profitability rather than borrowing more money or bringing in investors.
Co-owner of staff-owned veg box firm Riverford Organic
We became employee-owned, somewhat inspired by John Lewis. I feel completely gutted that they are thinking of selling shares to an investor.
It will be a very long burn
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