John Lewis considers program to alter employees-owned structure

• By Emma Simpson &amp Lucy Hooker
• Enterprise correspondent, BBC News

15 minutes ago

Image supply, Getty Photos

John Lewis is thinking of a possible alter to its employee-owned small business structure, upending a lot more than 70 years of tradition.

The group, which also owns Waitrose, is at present totally owned by its employees, who obtain a share in the earnings.

But in the face of tougher trading, the firm is stated to be exploring the notion of promoting a minority stake.

The Sunday Occasions, which 1st reported the move, stated the firm hoped to raise up to £2bn.

It stated the firm’s chairwoman Dame Sharon White was thinking of a possible program to dilute the renowned partnership structure in order to invest in much better technologies, information evaluation and Waitrose’s provide chain.

The BBC has been told the notion is at the “extremely, extremely early stages” of discussion and may perhaps not at some point come about. Having said that, if it did it would not quantity to removing the mutual ownership structure altogether and that employees would retain majority manage.

It could nevertheless prove controversial amongst employees, nonetheless, who jointly personal the complete of the small business, benefiting from any earnings.

The profit-sharing model has sometimes resulted in large windfalls. In 2008 employees received a sum equivalent to about ten weeks’ spend as a bonus.

Having said that in the previous 3 years the firm has had to steer by means of the choppy waters of the pandemic and a price of living crisis. It produced a loss of £234m in 2022-three and paid no bonus to employees, for only the second time due to the fact 1953. It has also closed shops and reduce employees numbers.

John Lewis has worked with outdoors providers in the previous: Ocado launched grocery deliveries for Waitrose and a lot more not too long ago it set up a joint venture to develop residential properties with investment firm Abrdn. If the move had been to go ahead, it would be the 1st sale of a stake in the core small business.

At instances the mutualised structure has been held up as model for how corporations could be run differently, taking a broader variety of stakeholders into account and focusing much less on shareholder profit.

When Sir Nick Clegg was deputy prime minister he heralded the group as a model for the complete economy.

John Lewis has not commented on the reports, but stated: “We’ve constantly stated we would seek partnerships to assist fund our transformation and fascinating development plans.

“We’ve performed this with Ocado in the previous and now with Abrdn. Our partners, who personal the small business, will be the 1st to hear about any developments.”