John Lewis considers the plan to change the staff structure

By Emma Simpson and Lucy Hooker
Business Correspondent, BBC News

3 hours ago

Image source, Getty Images

John Lewis is considering a possible change to his employee-owned company structure that would upend more than 70 years of tradition.

The group, which includes Waitrose, is currently wholly owned by its employees, who receive a profit share.

But in the face of tougher trading, the company is said to be exploring the idea of ​​selling a minority stake.

It said the company’s chairman, Dame Sharon White, is considering a possible plan to dilute the famous partnership structure to invest in better technology, data analytics and Waitrose’s supply chain.

The BBC was told the idea was still at a “very, very early stage” of discussion and might not go ahead. However, if this were the case, it would not result in the mutual ownership structure being eliminated entirely, and the employees would retain majority control.

However, it could still prove controversial among employees who collectively own the entire company and benefit from any profits.

The profit-sharing model has occasionally led to large windfalls. In 2008, employees received a bonus of around 10 weekly wages.

For the past three years, however, the company has had to navigate the choppy waters of the pandemic and a livelihood crisis. It made a loss of £234m in 2022-3 and failed to pay a bonus to employees for only the second time since 1953. It has also closed stores and cut staff.

John Lewis has worked with outside companies in the past: Ocado started grocery deliveries for Waitrose and recently formed a residential construction joint venture with investment firm Abrdn. Should the move go ahead, it would be the first sale of a stake in the core business.

At times, the mutualist structure has been presented as a model of how companies could be run differently, accommodating a wider range of stakeholders and less focused on shareholder returns.

When Sir Nick Clegg was Deputy Prime Minister, he heralded the group as a model for the whole economy.

John Lewis did not comment on the reports but said: “We have always said we would seek partnerships to fund our transformation and exciting growth plans.

“We have done this with Ocado in the past and now with Abrdn. Our partners who own the company will be the first to know of any developments.”


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