John Lewis Partnership Plc plans to raise up to £150 million ($183million) through the sale and leaseback a dozen Waitrose stores, as the struggling retailer looks to raise more capital.
A person who asked not to be named because the information was not yet public said that the marketing for the stores would begin next week. The majority of them are supermarkets located in southern England, with 20-year leases linked to inflation.
CBRE acts as an agent for the partnership that owns both the John Lewis department stores and the upmarket grocery chain. However, there is no guarantee the deal will happen.
John Lewis and CBRE’s spokespeople declined to comment.
John Lewis recently delayed an important turnaround plan by two year due to high inflation and low online sales that have hindered Sharon White’s attempts to revive the company. The partnership announced a loss of £56m in the first half, citing “hurricane-like” inflation and difficult market conditions.
In March, reports surfaced that the partnership had considered raising at least £1billion through the sale of a minority stake to invest in improved technology, data analytics and the Waitrose Supply Chain. Employees at the employee owned business reacted negatively to this potential proposal.
John Lewis, unlike its rivals listed on the stock exchange, has fewer options to raise capital for urgently needed improvements. The retailer can monetize valuable parts of the store estate through a sale and leaseback.
Proceeds from any possible store sale would likely be used to renovate and improve the appearance of Waitrose stores in order to compete better with customers during Britain’s current cost-of living crisis. Marks & Spencer Group Plc, a rival upmarket retailer, announced a £480-million plan earlier this year to improve its stores.
White, who took over the 2020 White Group in 2019, has sold stores, reduced staff and diversified into real estate and financial service. John Lewis appointed Nish Kankiwala as its first chief executive officer in the company’s history to help with the turnaround.