John Lewis Partnership will invest £1 billion to expand its online business and improve its stores, and will diversify beyond retail and seek more partnerships as it aims to recover profits, it said on Friday.
Detailing a five-year plan to grow the employee-owned department stores and Waitrose supermarket group, chairman Sharon White said she was targeting profit of £400 million by year five.
She is also seeking efficiency savings of £300 million a year by 2022.
The COVID-19 pandemic has hammered Britain's retail sector, leaving gaping holes on the country's main shopping streets and costing tens of thousands of jobs. The crisis has forced retailers to re-think their business models.
The John Lewis Partnership reported a first-half loss of £635 million last month.
“We’ve seen five years of change in the past five months and Waitrose and John Lewis have responded with great agility. Our plan means the John Lewis Partnership will thrive for the next century, as it has the last," said White.
The partnership's plan will see its two branches working much more closely together, cross-selling each others products.
The department stores business will become a 60-70% online retailer by 2025 from 40% before the crisis. It will retain its "Never Knowingly Undersold" price pledge for the time being.
Waitrose's delivery capacity will grow to over 250,000 orders per week, up from 55,000 before the pandemic, and it plans more partnerships like its recent trial with Deliveroo.
The group has a target of making 40% of its profits from new areas by 2030 and will invest £400 million to achieve it.
It will diversify into product rental and resale, develop some of its property into housing, expand its financial services into savings and insurance and consider acquisitions in the "outdoor living" area.
The partnership is also bringing forward its ambition to be net zero carbon by 15 years to 2035.
