Bloomberg | Oct 28, 2020 11:18
(Bloomberg) -- One of London’s most famous department stores is making room for a future beyond shopping.
John Lewis Partnership Plc has gained permission to convert the upper floors of its West End flagship store on Oxford Street into offices, a spokeswoman said by email. The decision by Westminster City Council comes as the government responds to the second wave of the coronavirus by imposing tighter restrictions on stores and restaurants in much of the U.K.
U.K. retailers have been battered by the pandemic, with lockdown and social-distancing measures keeping shoppers at home for months on end. London’s West End shopping and entertainment district has been hit hard as tourists disappeared and few office workers have returned to fill its restaurants and bars. Landlords including Shaftesbury Plc (LON:SHB), which owns a swathe of shops and restaurants in Soho, Carnaby Street and Chinatown, are struggling to collect rent from their retail tenants.
John Lewis is no exception. The company has been shuttering stores and building up its online operation to reach stuck-at-home shoppers. It foresees online retail sales accounting for as much as 70% of its total, compared with 40% before Covid-19 struck. As the company adapts to the virus and the long decline of traditional retail, it’s also building up its financial services business and expanding into rental housing.
London’s office market, by contrast, is showing signs of life. Large companies, from Netflix Inc (NASDAQ:NFLX). to Morgan Stanley (NYSE:MS), are in the process of undertaking big office moves that show demand for the biggest and best buildings is recovering from lockdown lows. Recent activity is mainly confined to large new developments, however, and as coronavirus restrictions tighten, there are still fears that vacancies could soar.
John Lewis hasn’t decided whether to turn the upper floors of its Oxford Street store into offices, the spokeswoman said. The building has a “surplus of non-selling space” compared with newer locations, and the company sought approval for the conversion to give it “greater flexibility” in how it uses that space.
Read more: City of London Firms Quietly Start to Rent Large Offices Again
©2020 Bloomberg L.P.
Written By: Bloomberg
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