The John Lewis Partnership, an iconic British retailer, is considering outside investors for the first time, a move that would dilute its 100% ownership through an employee ownership trust. John Lewis operates the John Lewis & Partners department store chain (34 stores) and Waitrose supermarkets (332 stores) and has 80,000 employees. The company had a loss of £78 million last year, and faced even tougher years during the peak of the COVID-19 pandemic. Inflation, a weaker British economy, and supply chain issues have added to ongoing problems.

John Lewis became an employee ownership trust in 1929 when its owner John Spedan Lewis transferred ownership to the trust. All employees would become beneficiaries (“partners”) in the trust. In the early years of the trust, they could get shares or a dividend, but that was later limited to a dividend only. The shares are held permanently in the trust. An employee council of 60 members elected by the partners acts as the governing body for major decisions. The John Lewis model was the inspiration for the current employee ownership trust law in the UK. In fact, when the current law was first being debated in 2012, all three major parties included promoting a “John Lewis” economy into their political platforms, a reflection of how beloved the company was in the UK. In 2014, profits from sales of companies to employee ownership trusts could be excluded from taxation.

The company is looking for an investment of $1.2 to $2.2 billion, which would provide the investors with minority ownership. The partnership council would have to approve. During the recession in 1999, the partnership council rejected a proposal to take John Lewis public.