The John Lewis Partnership is grappling with financial challenges over its new property scheme, casting doubts on profitability.
- The ambitious project involves constructing 428 flats above a Waitrose in West Ealing and 353 in Bromley, targeting 35% affordable housing.
- Financial analyses suggest a potential negative return of £57 million as project costs outweigh estimated worth.
- The initiative forms part of a broader strategy to diversify income, aiming for 40% non-retail profits by 2030.
- The company’s current financial difficulties include a £234 million loss and significant debts impacting progression.
The John Lewis Partnership is facing significant financial hurdles with its new property development plans. The proposed scheme aims to build 428 flats above a Waitrose in West Ealing and an additional 353 homes in Bromley. The project intends to incorporate 35% affordable housing, aligning with broader social objectives.
However, financial analyses indicate troubling projections. Planning documents reveal the venture could incur a negative return amounting to £57 million. This anticipated loss is attributed to the projected costs of the project, which are expected to reach around £240 million, surpassing the estimated valuation of £183 million.
This property development is part of John Lewis’s strategic plan to diversify its revenue streams. As stated by Dame Sharon White, the company’s chair, the goal is to derive two-fifths of its profit from non-retail sectors by 2030. This move is particularly significant given the company’s recent financial performance, which reported a full-year loss of £234 million.
Moreover, the company is currently managing substantial debt levels, with a reported £1.7 billion in obligations, including £350 million due for repayment within the next two years. These figures underscore the pressing need for careful financial management and possibly external investment to achieve a sustainable profit before 2026.
John Lewis’s property scheme exemplifies the challenging balance between ambitious expansion and financial feasibility.
