John Lewis is considering converting some of its store estate into housing in an attempt to strengthen its services business as the high street battles the impact of the coronavirus crisis.
The retailer, which owns the department store chain and Waitrose, said it is exploring the concept of new mixed-use affordable housing with third parties. Some of its shop estate could be repurposed for housing, it said.
John Lewis profits could take up to five years to recover following the coronavirus pandemic, boss Sharon White said this morning.
In an update on the progress of John Lewis’ strategic review White said “green shoots” should be seen within the next nine to 12 months, with profits recovering over the next three to five years.
She flagged the possibility of further redundancies at the high street retailer as it seeks to reduce head office costs by £100m.
“We will aim to make savings as early as possible this financial year and next,” White said. “These are very difficult decisions and I deeply regret the personal impact on partners.”
The retailer has already announced the permanent closure of eight sites, including department stores in Watford and Birmingham, which has put 1,300 jobs at risk of redundancy.
White, who joined the retailer in February, said John Lewis is in talks with potential partners and is also considering acquisitions as it seeks to strengthen its services offering.
Other options under consideration are expanding its financial services arm, developing a horticulture business and a rental and recycling platform.
White also outlined plans to become “digital-first” as changing shopping habits, such as the shift to online, have been accelerated by the coronavirus pandemic.
John Lewis is expected to become a 60 per cent online retailer, compared to 40 per cent before the coronavirus pandemic.
Waitrose’s online sales are forecast to rise above 20 per cent, from five per cent before the crisis, as the retailer invests to increase capacity to 250,000 weekly delivery slots.