John Lewis advisers have warned that it faces “extreme challenges” in making money from its scheme to convert parts of its stores into housing.
According to The Telegraph, plans to construct over 400 flats above a West Ealing Waitrose could cost the company far more than its worth on paper.
Planning documents have revealed the development could result in a negative return of £57m for the business.
Property consultant Quod, which carried out the early analysis, said the “financial viability of the scheme is extremely challenging”.
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Current predictions reveal that John Lewis’ scheme would be worth just £183m based on present-day values, but cost roughly £240m to carry out.
The project comes under one of the three housing schemes the business has in the works, under part of John Lewis Partnership chair Dame Sharon White’s attempts to diversify the company away from retail.
The business aims to generate two-fifths of its profits via non-retail areas by 2030.
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