// John Lewis faces backlash from MPs and industry experts over its plans to dilute the 100% staff-owned model
// Chair Sharon White is said to be exploring the possibility of selling a minority stake in the Partnership model to raise cash
Plans to dilute John Lewis’ 100% staff-owned model has faced criticism from Labour shadow trade minister Gareth Thomas and fellow industry experts.
Chairwoman Sharon White is understood to be exploring the possibility of selling a minority stake in the Partnership model to raise between £1bn and £2bn.
The Sunday Times reported the department store retailer was in the early stages of exploring a sale which would mean a change to the John Lewis constitution and would have to be voted on by its partnership council, made up of around 60 staff.
The news comes as the retail giant announced it would be cutting jobs and scrapping its partner bonus after swinging to a £234m annual loss.
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Retail analyst Nick Bubb said the news that John Lewis Partnership is looking to bring in an outside investor has “attracted criticism in some quarters, but there is a basic problem here, which is that the business is making no money and, unless it does that, it can’t provide a bonus for the staff and can’t raise money to invest in the stores”.
“Something clearly needs to change,” he added.
Thomas described the proposal as “very worrying” and reflected the country’s failure to expand the “permanent capital” model that British building societies can use to raise funds.
The MP for Harrow West posted on Twitter: “Mutuals shouldn’t have to stop being mutuals to be able to access the cash they need to expand, modernise or offer new services.”
Former PwC chief economist John Hawksworth tweeted the move away from 100% employee-owned was a “terribly short-sighted idea”.
“Demutualisation destroyed the building societies that tried it and would probably do the same for John Lewis, once the epitome of the good employer in the UK consumer services sector.
“Of course they face challenges but this is the wrong road to take.”
Former House of Fraser general manager turned leadership coach James Carpenter said: “The partnership model is and has been its unique selling point, however if the model longer term is not fully sustainable then they are right to explore different options.
“What is key though for me is how they are communicating these messages to the teams, involving them on the future of the business and what the options are to make sure the partnership is there for years to come.”
The Partnership appointed Nish Kankiwala as its first ever chief executive last week in a move to help the business “thrive for another century”.
Commenting on the possible sale of a stake in the Partnership, John Lewis said: “We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans.
“We’ve done this with [online grocer] Ocado in the past and now with [housing partner] Abrdn. Our partners, who own the business, will be the first to hear about any developments.”
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