Retailing giant John Lewis may be forced to change its 100 percent employee ownership to attract new investors to keep the chain afloat.
The change in the model would represent a massive departure for the company, which operates the department store chain and the Waitrose supermarkets.
The move comes after the retailer announced a loss of £234 million due to rising costs and declining revenues last week.
There were warnings of job cuts and staff were told it will not give out bonuses for the second time since 1953.
According to The Sunday Times, its chairwoman, Dame Sharon White, is in the early stages of exploring a plan to change its mutual structure in order to raise up to £2 billion in new investment.
According to the publication, the group would prioritize maintaining majority employee ownership and would only contemplate selling a small portion of its stock.
Any decision would need to be approved by the partnership council of the retailer, which consists of around 60 employees.
In another move to diversify its business operations in the face of challenging trading conditions, the company has considered entering the “build to rent” real estate market.
It struck a £500 million agreement with Abrdn, a worldwide investment firm, towards the end of the last year to help it build 1,000 additional dwellings.
The John Lewis Partnership said: “We’ve always said we would seek partnerships to help fund our transformation and exciting new homes.
“We’ve done this with Ocado in the past and now with Abrdn.
“Our partners, who own the business, will be the first to hear about any developments.”
The business was founded by John Lewis with a small shop on Oxford Street in 1864.
The partnership was established more than 70 years ago by his son, John Spedan Lewis, as an experiment in a better method of conducting business by involving employees in decision-making.
The John Lewis Partnership, now employs 74,000 people and is the largest employee-owned company in the UK.
Together with its retail websites, the business operates 34 John Lewis stores, 329 Waitrose stores, and other stores.
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As part of efforts “to become more efficient and productive,” Dame Sharon warned of job losses in a letter to the employees last week.
For the fiscal year that ended in January, a loss of £78 million was reported; however, when unusual charges were included, the loss increased to $234 million.
This included the value of Waitrose outlets being written down.
John Lewis blamed the decline on “inflationary forces,” citing a drop from a £181 million profit the prior year.
Source: Sky News