John Lewis Partnership Plc is planning to raise as much as £150 million from the sale and leaseback of a dozen Waitrose supermarkets as the struggling retailer seeks more capital, according to people familiar with the matter.
The marketing of the stores will begin next week and mostly includes supermarkets in the south of England with 20-year inflation-linked leases, said the people, asking not to be identified as the information isn’t yet public.
CBRE is acting as agent for the partnership, which owns the upmarket grocer and the John Lewis department store chain, they said, adding that there’s no certainty a deal will take place. Spokespeople for John Lewis and CBRE declined to comment.
John Lewis recently pushed back a crucial turnaround plan by two years as stubbornly high inflation and weak online sales have hindered Chairman Sharon White’s efforts to revive the business. Earlier this month, the partnership reported a first-half loss of £56 million, citing difficult market conditions and inflation which had “hit like a hurricane.”
Reports surfaced in March that the partnership was thinking about raising at least £1 billion through a minority stake sale so it could invest in better technology, data analysis and the Waitrose supply chain. The potential proposal faced pushback from staff at the employee-owned business.
Unlike publicly-listed rivals, John Lewis has fewer options for raising capital for much-needed improvements. A sale and leaseback allows the retailer to monetize parts of its valuable store estate.
The proceeds from any potential store sale could likely go toward overhauling and improving the look of Waitrose stores to better compete for customers during Britain’s cost-of-living crisis. Earlier this year upmarket rival Marks & Spencer Group Plc unveiled a £480 million plan to invest in improving its stores.
Since taking the helm in 2020 White has been selling stores, reducing staff and diversifying into real estate and financial services. John Lewis appointed a chief executive officer, Nish Kankiwala, for the first time in its history earlier this year to bolster the turnaround.
