While giving a financial update this month, John Lewis has set out new plans to diversify its business to boost its finances after announcing a £517m pre-tax loss for 2020.

Focusing on financial services, housing & outdoor living

“With retail margins declining and the partnership wishing to return more benefit to partners, customers and communities, we are aiming that by 2030, 40% of our profits will come from areas outside of retail, namely financial services, housing and outdoor living,” the organisation said.

Last summer, Advantage wrote about the mutual’s announcement that it was looking into converting unused retail space into affordable housing.

As reported by Inside Housing, during the year to January 2021, John Lewis swung from a profit of £146m to a loss of £517m and admitted that it “does not expect” all of its stores to reopen when coronavirus restrictions are lifted. The organisation said the year has been “one of the most challenging in the partnership’s history”.

Raised level of investment in the business

John Lewis said:

“We plan to invest £800m in 2021/22 to support our turnaround, approximately 40% higher than recent years. Given this raised level of investment, we expect our financial results – including liquidity, debt ratio, and profit before exceptionals – to worsen in 2021/22 and then improve in later years.”

In 2020, Advantage took a look at the government’s new planning rules, which will cut bureaucracy and will mean that full planning applications won’t be needed to turn vacant shops into new homes.

Advantage’s view:

As we wait to see how many of us will fully embrace high street shopping again when lockdown measures are eased, and how many of us have become accustomed to doing much more of our shopping online, it seems likely that other brands that are in a position to do so may follow John Lewis’s lead and make the move from retail to residential usage for at least some of their units.

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