// John Lewis Partnership is at the early stages of exploring a sale of a minority stake in the business to raise funds
// The sale would involve changing its employee-owned structure, which would need to be voted through by a council made up of its staff
John Lewis Partnership is mulling diluting its partnership structure, meaning it would no longer be 100% owned by its staff.
Chair Dame Sharon White is thought to be exploring the possibility of changing the retailer’s mutual structure in order to sell a minority stake to raise between £1 billion and £2 billion of new investment, according to The Sunday Times.
John Lewis Partnership, which owns both John Lewis and Waitrose, was put into a trust in 1950 by the founder’s son John Spedan Lewis.
In order to sell a stake, a change would be needed to the John Lewis constitution, which would have to be voted on by its partnership council, made up of around 60 staff.
More than two-thirds of the council would need to approve the plan.
However, any money raised through selling shares would go into the business, rather than to staff.
The business has been struggling of late and is amid a turnaround spearheaded by White.
This week it unveiled a £234m loss – £78m stripping out exceptionals – and was forced to scrap its annual staff bonus.
The retailer unveiled an aggressive cost-cutting plan and finance director Bérangère Michel warned that job cuts would be likely.
The plan was met with criticism from some analysts.
Savvy Marketing chief executive Catherine Shuttleworth said: “It’s cost-cutting plan. It’s not a retail recovery plan – and that concerns me. There’s not enough said about how they’re going to drive sales.”
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The partnership is understood to need up to £2bn investment in order to invest in better technology and data analysis as well as improving Waitrose’s supply chain.
A senior source told the newspaper that the business would only consider selling a minority stake.
“This would be to secure the partnership model and ensure co-ownership continues. There could be a shareholder but partners would still own the majority,” the source said.
It is also understood that the investor would have to share the partnership’s employee-centric values.
The idea of moving away from full employee ownership is likely to prove controversial. The last time it was mooted in 1999, one correspondent in JLP’s internal magazine described staff pushing for a stock market float as “gullible, greedy and selfish”.
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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