John Lewis, the British retail group known for its employee-owned business structure, is reportedly considering a potential change to its ownership model amid a tough trading environment.
The firm, which also owns supermarket chain Waitrose, is exploring the idea of selling a minority stake to raise up to £2bn, according to The Sunday Times.
The move would mark a significant departure from John Lewis's traditional business model, which has been fully owned by its staff, who receive a share in the profits. The profit-sharing model has occasionally resulted in big windfalls for employees, but in recent years, the firm has had to navigate the challenges posed by the COVID-19 pandemic and a cost of living crisis, leading to store closures, job cuts, and a loss of £234m in 2022-23.
To address these challenges and invest in better technology, data analysis, and Waitrose's supply chain, the firm's chairwoman, Dame Sharon White, is reportedly considering diluting the famous partnership structure. However, the idea is still at the "very, very early stages" of discussion and may not eventually happen, according to BBC sources. Staff would retain majority control even if a stake were to be sold.
The move could still prove controversial among staff, who jointly own the whole of the business and benefit from any profits. At times, John Lewis's mutualised structure has been held up as a model for how businesses could be run differently, taking a broader range of stakeholders into account and focusing less on shareholder profit.
If the move were to go ahead, it would be the first sale of a stake in the core business, although John Lewis has worked with outside companies in the past, such as Ocado for Waitrose's grocery deliveries and Abrdn for a joint venture to build residential properties.
As John Lewis considers potential changes to its business model, the retail sector is grappling with rising costs and supply chain disruptions amid the ongoing pandemic. Retailers have been forced to adapt to changing consumer behavior, with more shoppers moving online, and face intense competition from e-commerce giants like Amazon.