Nearly half of John Lewis’s flagship store on London’s Oxford Street could be turned into office space as the embattled department store chain tries to stem its losses and return to profit.
The John Lewis Partnership, which runs the department store chain and the Waitrose grocery arm, secured conditional planning permission from Westminster City Council last night.
The unanimous decision by the council’s planning sub-committee, made on the basis of exceptional circumstances, could see up to 45 per cent, or 28,135 square metres, of the flagship shop floor converted to offices.
Flagship: John Lewis’ flagship department store is on London’s Oxford Street
Ordinarily, Westminster’s planning laws state that development proposals should ‘sustain and enhance the vitality and viability’ of its ‘globally renowned retail destinations.’
The retailer, which is already struggling in a rapidly evolving retail environment, has been hard hit by the pandemic and announced earlier this month it wants to save £300million each year by 2022.
It suffered a £635million pre-tax loss for the first six months to July following a £470million write down on its stores.
Hard hit: Retail areas like London’s Oxford Street have been hit hard by lockdowns
New rules: Fitting rooms remain closed and social distancing measures remain in place across John Lewis’ stores
At the helm: New John Lewis boss Sharon White is on a mission to turn the department store chain’s fortunes around
In July, the department store group revealed that 1,300 jobs were at risk due to the planned closure of eight John Lewis stores, and that a further 124 jobs were on the line with the closure of four Waitrose stores.
The ailing department store chain will permanently close its large stores in Birmingham and Watford, as well as smaller outlets at Heathrow airport, St Pancras train station in London and four At Home shops in Croydon, Newbury, Swindon and Tamworth.
More store closures have not been ruled out and staff recently learned they will not receive a bonus for the first time since 1953.
But the retail giant hopes to swiftly return to profits of £200million in the next two years and £400million by 2025 through a programme of rapid diversification.
As well as growing its financial services arm, it has plans to expand into housing with 20 sites earmarked for potential development.
According to the real estate adviser Altus Group, the John Lewis Oxford Street store in its entirety has a rental value on the open market of £19.91million – the third highest in England.
Elsewhere, the John Lewis Partnership is planning to invest £1billion over the next five years to grow its online operations.
Growth: Waitrose’s delivery business grew during the pandemic and it recently announced plans to expand its rapid delivery service through Deliveroo
It also plans to cut prices for shoppers, launch a new homeware range and introduce ‘more affordable’ budget ranges to counter the perception that it is expensive.
It said the move would ‘broaden our appeal to more customers’ when shoppers are ‘especially cost-conscious’.
Bosses want online sales to make up between 60 per cent and 70 per cent of department store revenues, up from 40 per cent before the pandemic, and up to a fifth of its food business.
Some £100million has been put aside to grow financial services and it is considering a move into horticulture and garden design.
New boss Sharon White hopes new services will contribute 40 per cent of overall profits by 2030 and reduce its reliance on retail.
The Waitrose delivery business also grew during the pandemic and it recently announced plans to expand its rapid delivery service through Deliveroo.