Fresh funding from the stake sale would go towards better technology and data analysis, as well as the Waitrose supply chain, according to the source.
LONDON: John Lewis Partnership Plc is considering selling a minority stake, thereby diluting its employee-owned structure, as the cost-of-living crisis puts pressure on the UK retailer to seek new investment.
The company, which owns the high-end grocery chain Waitrose as well as its eponymous department stores, may explore a change in the company’s mutual structure so it can raise at least £1bil (US$1.2bil or RM5.4bil), according to a person familiar with the matter.
Fresh funding would go towards better technology and data analysis, as well as the Waitrose supply chain, the person said.
For more than seven decades, John Lewis has been owned by its employees or partners, now amounting to about 80,000 people. Selling a minority stake would require a change to its business constitution, which would be voted on by the company’s partnership council, a group of about 60 staff.
The plan is being overseen by chairperson Sharon White, who took office in 2020 and led an overhaul at John Lewis, including closing stores, cutting staff and selling assets. The Sunday Times first reported the information.
“We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans,” a spokesperson for John Lewis said in an emailed statement.
“Our partners, who own the business, will be the first to hear about any developments.”
Unlike publicly listed companies, John Lewis cannot raise cash from stock markets, and the business has £1.7bil (RM9.3bil) of net debt with a £300mil (RM1.6bil) bond coming due in 2025.
The move comes after John Lewis last week reported a £234mil (RM1.3bil) loss, cancelled its employee bonus for the second time in three years and warned of new job cuts.
The company is losing ground to Marks and Spencer Group Plc (M&S), which recently reported its best-ever market share in food retailing. M&S replaced Waitrose in a tie-up with Ocado in 2020.
There have already been plenty of changes lately at John Lewis. Last week, the company appointed a chief executive officer (CEO) for the first time in its history. New CEO Nish Kankiwala, who has been on the board for two years, has turnaround experience at breadmaker Hovis and at Burger King. He was appointed after an internal search. — Bloomberg
