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John Lewis Switching Some Store Square Footage to Office Space

In a sign of the depressed U.K. retail sector, John Lewis Partnership has received approval from the Westminster City Council to pull back on the square footage at its Oxford Street store.

The plan to cut 40 percent of the sales square footage and convert the space to offices was floated last month as the company was reviewing its business. With the retail sector hard-hit by the coronavirus pandemic, retailers have been rethinking their operations and store footprints.

The department store retailer back in July said it planned to shrink its payroll, and had been reviewing its store count. About 1,300 jobs are at risk. Two department stores in Birmingham and Watford are slated for closure, along with travel hubs at Heathrow and St. Pancras.

“The reality is that we have too much store space for the way people want to shop now and we have shared this with our Partners. As difficult as it is, it is highly unlikely we will reopen all our John Lewis stores,” a John Lewis spokeswoman said at the time.

And earlier this month, the company outlined a five-year plan to return the company to profitability, with the aim of a 400-million-pound profit ($519.7 million) by the end of the five-year plan. A big part of the plan is to generate sales of between 60 percent to 70 percent of its business from its online platform. To reach that goal, John Lewis will invest one billion pounds ($1.30 billion) into e-commerce.

Meanwhile, U.K. retailers are bracing for a second round of temporary shutdowns as Covid-19 infections seem to be on the rise again. While a new three-tier system of restrictive measures so far has spared the retail sector, it isn’t clear how long that will last given that localized lockdowns in some places, such as Wales, are in effect.