John Lewis Predicted to Make Huge Losses from Ealing Scheme
Industry analysis estimates shortfall of £57 million on the project
Visualisation of the scheme looking along Alexandria Road. Picture: Sechi Smith
September 12, 2023
A report by a planning and development consultancy has concluded that the redevelopment of the Waitrose in West Ealing by John Lewis will lose the partnership money.
The analysis by Quod, which was outlined in an article in this weekend’s Sunday Telegraph, estimates that the project cost for the scheme which will contain 428 flats will be £240million but it will be valued at on £187million on completion, a shortfall of £57million.
The company announced a significant diversification into property development following the appointment of Dame Sharon White as its chairperson in 2020. It has a number of projects in the pipeline, which will see branded build-to-rent (BTR) flats constructed which will be decorated with John Lewis items. Its target was to have 40% of its profit coming from non-retail businesses including property by 2030.
John Lewis Partnership (JLP) has been struggling in recent years, due to a combination of factors, including rising costs, competition from online retailers, and a decline in footfall on the high street. It has sought to tackle the problem of falling revenues by closing underperforming stores and investing in its online business. The move into property was a recognition of the longer-term challenges facing retailers and the Ealing scheme was an important part of this strategy.
A visualisation of the proposed development. Picture: Sechi Smith
The partnership’s management remain confident that the Ealing scheme will be a success due to the long-term steady cash-flow it will generate as well as the improved sales potential of the new store in the development.
However, the foray into property has not had an auspicious start with the company reportedly unable to offload the upper floors of its Oxford Street store for conversion into office space. In March JLP reported an annual loss of £234million and this June, Chris Harris, who was responsible for setting up the BTR business announced he would be leaving later this year.
The application for the West Ealing scheme was submitted recently but could face a rough ride through the planning process. The project has met with a hostile response from the leader of Ealing Council who accused JLP of bullying and being vague on its commitments on affordable housing within the scheme. The scheme, which will include four blocks of up to 20 storeys, will also meet opposition from local campaign such as Stop The Towers which has pointed out the height is well above the guidance for the area.
Developer's drawing showing the scale of the towers in context. Picture: Sechi Smith
A spokesperson for JLP said, “We want to make long-term commitments to our communities through our stores and building much-needed new homes.
“We can take a longer-term view and want to create as many affordable homes as we can for key workers such as nurses, teachers, the police and care providers.”
To have your say visit the planning section of the Ealing Council web site and use the application reference 233076FUL to search.
When John Lewis first put forward this scheme it said it was aiming to start construction this summer with projected completion in 2027.
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