John Lewis looks at converting empty shops into housing

John Lewis is looking at turning empty stores into privately rented housing as it moves to expand beyond its traditional retail offer and safeguard the long-term future of the business.

The employee-owned group is also considering branching out into product rental and the resale of “used” items as it eyes new markets as part of its strategic review.

With customers increasingly shopping online, the retailer will become “digital first”, with stores supporting internet sales, according to the company.

More Waitrose outlets could also close as the firm examines its supermarket arm’s estate based on customer demand.

Ideas for the future direction of the retailer were outlined to staff in an update by Dame Sharon White, chairman of the John Lewis Partnership.

In a letter to workers, Dame Sharon said: “Retail profit margins are under pressure. For the partnership to be sustainable over the long-term, we need to expand beyond retail.”

As well as the potential to grow its financial services arm and exploring an expansion into horticulture and garden products, another area identified was privately rented housing.

They were among the “many exciting ideas” proposed by employees, which have been selected for further development.

Dame Sharon wrote: “As we repurpose and potentially reduce our shop estate, we want to put excess space to good social use.

“We are exploring with third parties the concept of new mixed-use affordable housing.”

It follows the announcement by John Lewis that it plans to shut eight of its shops – putting 1,300 jobs at risk – after the coronavirus pandemic accelerated the shift from in-store shopping to online.

The shops to close are: two full-size department stores in Birmingham and Watford; four At Home shops in Croydon, Newbury, Swindon and Tamworth; and two travel hub shops at Heathrow and St Pancras.

John Lewis had previously warned that not all of its shops would reopen after the COVID-19 lockdown – which saw the chain shut all 50 of its stores before beginning a gradual reopening.

The suggestion of finding alternative uses for its empty shops comes as the government moved to streamline the planning system to enable more homes to be built.

Under latest fast-track rules, full planning applications will not be required to demolish and rebuild unused buildings as homes, allowing commercial and retail properties to be quickly repurposed.

Dame Sharon also said the company was still looking to save at least £100m through cuts at its head office, which has seen the number of senior managers reduced by a third.

“These are very difficult decisions and I deeply regret the personal impact on partners,” she wrote.

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