John Lewis Partnership has agreed to a £125m deal to sell 11 of its Waitrose stores to investment firm M&G.
The business will leaseback the supermarkets, which are predominantly located in the south of England, on 20-year inflation-linked contracts.
The deal comes as the partnership is looking to raise additional cash to fund its turnaround plan, which suffered a two-year setback due to inflationary pressures.
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It was reported the company had put a dozen of its Waitrose supermarkets up for sale in September with the hopes of raising £150m.
The Partnership revealed it was stepping up its turnaround efforts earlier this year when it emerged the business was planning to cut more than 10% of its workforce or 11,000 jobs over the next five years as it plans to reduce its cost base by £900m.
It is understood the number of roles in the business is expected to gradually reduce over several years via redundancies and not replacing staff who leave.
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Oh dear, sounds like they’ve just signed their own death warrant, exactly what Woolworths did and look what happened to them!!
This is scorched earth now…
I think the sale and lease back deal for Waitrose is a good idea, when combined with 20 year inflation linked rental as part of it. The Partnership should be reluctant to extend sale & lease back to John Lewis, where possibilities exist.
Department store and supermarket retailing are completely different animals. The fact that they have been led by one Chair, and a non retailer at that, reflects the worst of decisions.
I do not see the synergy to be there for continuing as one Partnership covering the two businesses. Far better that each brand splits away to follow independent Partnerships, or other innovative ownership structures from which, staff as stakeholders, can benefit in a positive future.
Geoff
Is it me or do you think the reason that Waitrose constantly has empty shelves so the merchandizers aren’t doing there job properly. I don’t see this in any other supermarket. Also they are too expensive on basics and where people used to go there for something different that’s just not the case any more. Also who ever thought it was a good idea to get someone from the civil service with absolutely no retail experience & it would seem no fashion flair to run such a great company. I’d love to know on what merit she got the job. M&S are now running rings over them & the more they decline the more chance M&s will end up buying them for practically nothing. SHAME!
Geoff, that would lead to the end of John Lewis or being brought by Mike Ashley.
I hope you would be wrong, Numan. I believe there could be a planned innovative route to turnaround and success, with funding in place, before an announcement of a split in brand strategies. John Lewis and Waitrose are brands that are too good not to inspire progressive plans and funding to match. As I said Numan, I hope you are wrong.
Geoff
… they’ve probably sold them to their own property development company…so not like woolies..etc….
No sold to M&G… More will be sold so Sharon can say she’s made a profit. Sharon isn’t that smart, trust me.
the idea that this is the result of JLP doing something wrong is laughable. no retailer is making profits from sales at the moment given the state of the economy. M&S were half as geniuses for turning a small profit after doing the exact same thing last year. Let’s not talk about the elephants in the room.
Brexit. And Liz Truss’s catastrophic tenure as Prime Minister.