John Lewis Partnership seeks to cut costs from landlords

3848
John Lewis Partnership John Lewis Waitrose
John Lewis Partnership announced a major restructuring of its management teams earlier this week
// John Lewis Partnership told landlords it will withhold 20% of this quarter’s service charge
// The partnership said that the current service charge is too high
// The move could result in legal action being taken by landlords to recover unpaid bills

John Lewis Partnership has said it would seek discounts from landlords as it looks to cut costs.

The partnership told the landlords of some of its properties that it will withhold 20 per cent of this quarter’s service charge, the BBC reported.

The parent company of John Lewis and Waitrose said that the current service charge was too high.


READ MORE:


However, the move could result in legal action being taken by landlords to recover unpaid bills.

Earlier this week, John Lewis Partnership revealed plans to restructure the business in order to streamline office roles, cut costs by £100 million, and bring its two retail chains closer together.

Outgoing chairman Sir Charlie Mayfield drew up plans to reduce duplication at the business to cut costs.

From next year its supermarkets and department store divisions will be run as one business.

“At a time when we are doing everything we can to reduce our cost base, we have unfortunately been faced with regular increases to the service charges we pay for some of our shops in shopping centres,” John Lewis said in a statement.

“Over the last three years we have seen an increase in service charges of 20 per cent and these continued increases are simply not acceptable, particularly in the absence of strenuous efforts by landlords to work collaboratively with us to reduce these costs.

“We are investing more in our current shop estate than ever before to do everything we can to encourage customers to grow footfall to our shops and we hope that our landlords will support us in continuing to do this.”

John Lewis is not the only retailer on the high street to seek rent cuts, as department store chain Debenhams slashed its rent bill with reductions of up to 50 per cent after securing a CVA restructuring deal with its creditors earlier this year.

Meanwhile, House of Fraser – bought out of administration by Mike Ashley’s Sports Direct last summer for £90 million – has extended its administration by another year.

Click here to sign up to Retail Gazette’s free daily email newsletter