John Lewis Partnership chair Sharon White has promised to “get the partnership back to sustainable profit” before 2026, but warned that this may require external investment.
White told the Employee Ownership Association that she was confident her plan to create a “broadly based business with brilliant retail at the core, built on excellent customer service, quality and ethics” will bear fruit.
However, if it is not able to fund the turnaround by itself, it “could look at whether external investment was needed”, she said.
White said: “As an employee-owned business the partnership has for decades funded itself from the cash generated by trading, from asset sales and debt and said although the plan ‘assumes’ this funding route would continue there were ‘clearly risks’.”
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
She flagged that the scale of investment needed in areas such as the Waitrose supply chain and technology was “greater after the business’s rapid expansion and period of austerity”.
White said: “The tragedy would be to walk past what needs to be done to ensure the Partnership has the fuel it needs to invest, transform and grow.
“If the Partnership could not fund all of the plan by itself, the board could look at whether external investment was needed.”
However, White said that any investment arrangement would have to be in line with partnership’s trust settlements, which guarantee employee ownership and a share in the profits for partners.
White’s tentative plans to sell a stake in the business were met with criticism when they emerged earlier this year. Ex-John Lewis managing director Andy Street branded it a “tragedy” while retail guru Mary Portas warned that the business has “let go of its soul”.
White has been under pressure of late. At the biannual partnership council meeting last month, 41 of the 61-member council said they did not have confidence in the progress of the partnership under her leadership over the past year, however, they narrowly backed her future strategy.
The group, which operates Waitrose as well as the John Lewis department store, posted a £234m full-year loss in March. Meanwhile debts at the business have swelled to £1.7bn with £350m due to be repaid in the next two years.
The famous John Lewis Partnership staff bonus was scrapped last year for only the second time since 1953. White said that the bonus would only return “when affordable”.
