John Lewis Partnership faces potential financial issues with its property development plans.
- The company plans to build new flats above Waitrose outlets in West Ealing and Bromley.
- Reports indicate a negative financial return of £57m for the project.
- Consultants warn about the project’s challenging financial viability.
- John Lewis seeks to diversify away from retail to reduce financial losses.
The John Lewis Partnership is addressing significant financial challenges related to its latest property development initiative. Plans to construct 428 flats in West Ealing and 353 in Bromley include a commitment to 35% affordable housing. Despite these ambitions, the project’s financial outlook is concerning, as planning documents reveal a potential negative return of £57m, according to The Telegraph.
Specialist consultants from Quod conducted an early analysis of the project, which has highlighted that the financial viability of the scheme appears ‘extremely challenging’. Current assessments estimate the cost of the project at around £240m, while its projected value stands at approximately £183m. This discrepancy raises significant concerns about profitability.
This property scheme occurs as part of John Lewis’s strategic plans under the leadership of Dame Sharon White, who aims to diversify the company’s revenue streams. The overall goal is to secure two-fifths of its profits from non-retail ventures by the year 2030. However, the path to achieving sustainable profit may require external investment, as indicated by Chair White.
Financially, the company posted a £234m loss in the previous full year, with cumulative debts reaching £1.7bn. There is a pressing need to repay £350m over the next two years. This context underlines the gravity of the current financial predicament and the importance of the new diversification strategy.
The John Lewis Partnership’s ambitious property development plans face significant financial hurdles in aligning with profitability goals.
