The John Lewis Partnership, the famous department store and purveyor of household goods to the middle classes, is to become a major residential landlord, write Tom Entwistle.
The retailer, with over 50 department stores across the UK, is planning to eventually build around 10,000 rental properties, some of which it will let out to staff (partners) on favourable terms.
“We are aiming to charge a fair rent and to stay in this for the long haul,” Chris Harris, the John Lewis’ property director told the Sunday Times newspaper.
Under the leadership of its new chairman, Sharon White, 52, the partnership carried out a strategic review last October, which is to position Waitrose its food supermarket, and John Lewis the department stores, as the “go-to brands for customers who want quality, value and sustainability.”
The strategic review was based on feedback from around 8,000 customers, over 100 suppliers and local community groups and 12,000 Partners, who submitted more than 450 ideas, says the retailer.
£1m salary
Dame Sharon White, 52, formerly CEO of Ofcom, joined John Lewis last year on a £1m salary at a time when traditional retailers are feeling the pinch, squeezed by the public’s move to online shopping and when supermarkets are losing business to discount operators.
The partnership’s new strategic plan, it would seem, involves a rather dramatic shift in focus to involve the plans to build 10,000 rental homes over the next decade in an attempt to revive its erstwhile fortunes, by becoming a residential landlord.
John Lewis has been struggling of late with falling sales and profits amid increasing competition from online rivals and the effects of the pandemic on its department stores. Dame White closed 16 of its previously profitable 51 department stores since she took over in February last year, whilst, for the first time since 1953, she has scrapped the staff bonus.
7,000 rental homes
The bellwether retailer – never knowingly undersold – has now identified space within its own property portfolio for around 7,000 rental homes ranging from studio flats to four-bedroom houses. The plan it to utilise space in its own car parks, above Waitrose supermarkets and near its distribution centres. It also has future plans to develop brand new sites.
John Lewis tenants will have the option of renting accommodation that is fully furnished with its household furnishings, or providing their own. It is likely the new housing developments will come complete with a concierge service and some will possibly feature a Waitrose convenience store at the door.
The initial developments will be located in southeast England, but the partnership has said there are opportunities right across the country, given the extent of pent-up demand for rented property.
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