John Lewis ‘risks becoming another Debenhams’ if he abandons cherished staff ownership model, campaigners warn
John Lewis risks becoming ‘just another Debenhams or Sports Direct’ if he abandons his cherished staff ownership model, campaigners fear.
The 158-year-old retailer is currently owned by its 74,000 employees, which means it is run for their benefit.
But chairman Dame Sharon White is considering a plan to sell a minority stake in the group, which also owns Waitrose. She wants to raise up to £2billion to invest in the struggling business to put it back on a sustainable footing.
It is struggling with a downturn on the high street – as shoppers increasingly move online – and has haemorrhaged money due to the pandemic and soaring costs of living.
But the move – which would attract outside investors for the first time in more than 70 years – would be a sea change for John Lewis. It would take a modification of the statutes of the firm to water down its mutualist status.
John Lewis risks becoming ‘just another Debenhams or Sports Direct’ if he abandons his cherished staff ownership model, campaigners fear (file image)
John Lewis opened its first store on Oxford Street in London in 1864. It now has 34 department stores across the country and 332 Waitrose supermarkets.
The firm’s partnership structure saw it hailed as the ideal employer, with then Deputy Prime Minister Nick Clegg saying in 2012 that it should be the model for the whole economy .
And in January White, who has been in charge since 2020, said the company was aimed at “making the world a happier place” rather than maximizing profits. She said that values are always an integral part of the group.
John Lewis needs up to £2billion to invest in technology and data analytics as well as in Waitrose’s supply chain, The Sunday Times has reported.
He cannot raise funds from staff and is limited in how much he can borrow as he currently has £1.7billion in debt.
Peter Hunt, of mutual lobby group Mutuo, said a change to its partnership model “would just turn it into another Debenhams, or Sports Direct or something like that”. He added: ‘At the end of the day, their employee ownership makes them different and that’s why people love them’
Hunt warned that John Lewis raising up to £2billion would mean nearly half of the business could end up being owned by an outside investor.
Labor MP Gareth Thomas, chairman of Parliament’s cross-party group for mutuals, said the plans were “extremely worrying”.
Peter Hunt, of mutual lobby group Mutuo, said a change to its partnership model “would just turn it into another Debenhams, or Sports Direct or something like that”. Pictured: Archive image of the Worthing Debenhams store
He said: “If John Lewis were to lose mutual status it would be devastating to the staff as well as the families across the country who have cherished the business for decades.”
“Staff ownership makes John Lewis special, and it would be a sad situation if that changed.”
Thomas and Hunt said the change wouldn’t be necessary if it was possible for the company to raise funds without employees losing control.
Thomas said: “Ministers could prevent this with new laws allowing companies like John Lewis to raise funds without having to give up mutual status.
“If the political will was there, this could be sorted out and John Lewis’ mutual status could be saved.”
John Lewis has insisted the plans are not intended to remove his mutual status. But a spokesperson said: “We have always said we are looking for partnerships to help fund our transformation and our exciting growth plans.
“Our partners, owners of the company, will be the first informed of any development.”
