John Lewis is looking into raising £150m from the sale and leaseback of a dozen Waitrose supermarkets to fund investment in updating the business.
The staff-owned retailer, which this month announced a half-year loss of £59m, wants cash to update stores, improve prices and invest online operation, including expanding online grocery deliveries.
Marketing of the Waitrose stores, which are mostly in the south of England, with 20-year inflation-linked leases, will begin next week by the property advisory firm CBRE, according to Bloomberg, which first reported the potential deal. It is understood that there is no certainty a deal will take place.
This year, reports emerged that Sharon White, the chairman of the John Lewis Partnership (JLP), which owns 35 department stores as well as the 329 Waitrose shops, was considering selling a minority stake in the group to raise at least £1bn for investment. However, she said the business would not step away from its staff-owned model after the idea of selling a stake was criticised by staff and retail industry experts.
White survived a vote of confidence in May, when staff backed her to continue as chair, despite expressing dismay at the retailer’s poor performance.
At its half-year results, JLP said it would need an extra two years to deliver its turnaround plans as it continued to face pressures from higher costs and caution from shoppers during the cost of living crisis.
The plan is being spearheaded by the partnership’s first chief executive, Nish Kankiwala, a former Hovis and Burger King executive, who took up the role in late March. Efforts include tripling its target for cost savings to £900m by January 2026 and cutting prices on key items at Waitrose.
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The group has been struggling for several years amid rising costs and lower shopper numbers on high streets where its large department stores are located. Staff were told in March they would not collect an annual bonus after the retail group fell into the red, posting a worse-than-expected £230m full-year loss.
