John Lewis could convert almost half its Oxford Street store into offices

John Lewis is working on plans for a massive reduction in the size of its London flagship store, converting entire floors into offices, as shoppers switch to buying online and the crisis on British high streets turns into a fight for survival amid the Covid pandemic.

The staff-owned department store has applied for planning permission to switch up to three floors of its landmark Oxford Street store – which currently house children’s ranges, electrical goods, kitchen and bathroom departments as well as dining areas – into office space for rent.

The site on one of Europe’s most high-profile shopping thoroughfares has been of totemic importance to the retailer, at one point accounting for 10% of the department store chain’s revenues.

Plans filed with Westminster council leave four floors of retail space below the three new office floors. The store’s topmost floors are already largely office and storage space used by the retailer. A new cycle parking area is planned in the lower basement while the store’s roof garden dining area on the sixth floor would be retained.

The potential changes, first reported by the London Evening Standard, come as John Lewis battles to stem losses in the face of heavy competition from online and other high street players.

The chain is expected to crash further into the red at its half-year results on Thursday after permanently closing eight of its 50 outlets. Among the stores shutting is the vast Birmingham city centre store, which has only been open for 5 years.

John Lewis said it had no immediate plans to alter the building on Oxford Street, where it has traded since 1864, but was seeking planning permission to give it options in the future. If approved, the planning permission would last for ten years.

A spokesperson said: “Oxford Street is our largest and oldest shop and has a surplus of non-selling space compared to our newer shops. We have therefore made a planning application for the upper floors of the shop, to give us greater flexibility on how we use this space more efficiently in future, with the potential to have office space at the top of the building.

“While no decisions have been made, any plans would look to further improve our customers’ experience.”

The latest plans have emerged after Sharon White, the new chairman of the department store’s parent group, the John Lewis Partnership, said she would look at downsizing stores as part of plans to reshape the group for the future. She has floated the idea of turning all or parts of stores into housing.

Profits at John Lewis fell 65% in the year to January, even before Covid-19 hit, and the group has said it is unlikely to pay any annual bonus for the year ahead as it tries to cut costs.

Even before the pandemic spurred the trend for online shopping, department stores have faced particular difficulties as their large sites with long leases have been tricky to adapt to changing shopping habits.

John Lewis’s rivals Debenhams, House of Fraser and Beales have all gone into administration. Beales closed completely before at least one site relaunched under new owners, while Debenhams and House of Fraser have shut numerous stores.

The coronavirus outbreak has put further pressure on city centres, particularly London, as the shift to working from home and disappearance of day trippers and tourists has left formerly busy areas quiet.

Government advice to avoid public transport put shoppers off travelling into central London, where the underground is a vital transport link, and they have so far failed to return to old habits.

The tube in London is currently moving only a third of the usual number of passengers. At the same time, the mayor, Sadiq Khan, approved an increase in the daily congestion charge for those who want to drive into the city centre to £15 a day, and extended it to seven days a week.

Data last month from the New West End Company, which represents 600 businesses across Oxford Street, Bond Street, Regent Street and Mayfair showed that footfall in the West End was still 63% down on 2019 levels. Khan, warned the capital faced an “existential threat” from the pandemic.

One in 10 Londoners are employed in the West End area, and without a boost to consumer confidence the capital’s premier shopping area is facing job losses of 50,000 and lost annual sales of more than £5bn, the NWEC has warned.

The Social Market Foundation has said the decline of the traditional high street could not be reversed by policies that “turn the clock back” and suggested more retail sites should be converted into homes.

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