THE John Lewis Partnership has issued a retail bond for its cardholders and Partners in a bid to raise £50m of funds by April.
Customers who hold either the Partnership or Account cards, as well as current Partners in the employee-owned firm, can invest lump sums of between £1,000 and £10,000 into the John Lewis Partnership bond without having to go through a broker.
The bond is a five-year savings product that offers investors a fixed annual return of 4.5 per cent in cash with a further two per cent paid in John Lewis gift vouchers. At the end of five years, the Partnership will return customers’ investments in full.
The Partnership is inviting cardholders to apply between today and 11 April, with applications confirmed on a first-come, first-served basis. The issue will be closed when total bond applications reach £50m.
Charlie Mayfield, chairman of the John Lewis Partnership, believes current low interest rates and yields make the retail bond an attractive investment option for the company’s Partners and cardholders.
He said: “For many years, the Partnership has raised finance via corporate bonds and bank lending. We want to explore alternative ways of raising funds as part of the Partnership’s borrowing programme, and to reach out to the retail investor.”
Ian Fleming, head of Treasury at the John Lewis Partnership, said: “We carried out research among our cardholders to see which features they valued and they told us they wanted a competitive return with the added reward of gift vouchers.”
John Lewis Group is expected to post increased profits when it posts its full-year results on Wednesday, despite a slowdown in sales.
Analysts predict the business will post a 15 per cent rise in pre-tax profits to £352m for the year to January, with employees collecting a corresponding annual bonus payment of at least 15 per cent of their salary.
PREVIOUS FLOAT OFFERS FOR CUSTOMERS
Middle England’s favourite online grocer offered priority shares to customers last summer as part of its initial public offering. The flotation had a disastrous start and the share price tumbled, but has steadily risen since.
Eurotunnel sold shares to 4,000 foundation holders in 1987, entitling them to unlimited travel for £1 a year until 2086. But huge losses subsequently sent the tunnel operator’s shares into meltdown.
● Hotel Chocolat
The candy maker aimed to raise £5m by persuading customers to invest in three-year bonds in the company that paid interest on customers’ investments in boxes of chocolates.
● King of Shaves
The men’s grooming brand offered shavers the chance to invest in the firm’s growth by issuing 5,000 shaving bonds, which aimed to pay back six per cent over three years.
Tesco Bank’s retail bond smashed expectations by raising £125m from private investors, above the company’s target of £50-£100m. The bond launched last month as part of the London Stock Exchange’s new retail bond market.