Council under fire for £3.4 million ‘gamble’ on John Lewis staying in Sheffield – and what happens now they’ve lost?

Politicians at Sheffield City Council must be held accountable for a failed £3.4m ‘gamble’ on John Lewis, an opposition councillor says.

By David Walsh
Wednesday, 24th March 2021, 1:40 pm

Labour councillors took a huge risk in buying the department store during a pandemic and leasing it cheaply back to the company to encourage it to stay in the city.

And it would be a ‘catastrophic oversight’ if there is no ‘clawback clause’ requiring the chain to pay the money back if it closed, according to Lib Dem leader Coun Shaffaq Mohammed.

John Lewis has announced plans not to reopen the store in Barker’s Pool after lockdown, affecting 299 staff. It is one of eight it says it ‘cannot profitably sustain’ due to the pandemic and online shopping.

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John Lews in Sheffield City Centre is set to close. Picture: Chris Etchells

Mr Mohammed said it was ‘devastating’ news for almost 300 families who were part of a Sheffield institution.

He added: “It’s a massive blow for the city centre. It’s an anchor store and a magnet that drives footfall.

“I’m also very concerned for the taxpayers of Sheffield if there is no clause in the legal agreement that claws the money back. John Lewis cannot be given a golden goodbye.

“The decision taken in August during a pandemic was risky. They gambled on John Lewis staying and lost. There’s clearly been a breach of trust and I feel let down by senior John Lewis management. But there has also been naivety by politicians. A lack of clawback clause would be a catastrophic oversight for which politicians must be answerable.”

Lib Dem leader Coun Shaffaq Mohammed.

A John Lewis spokeswoman said the deal with Sheffield City Council was ‘commercially sensitive’ and she could not provide details.

Last week, a city council spokesman insisted they paid a ‘fair price’ for the lease. Owning it gave them ‘control’ to continue with wider ambitions for the city centre.

No money had spent on refurbishment to date, she added.

Nalin Seneviratne, Sheffield City Council’s director of city centre development mourned the ‘sad news’ but said Sheffield was ‘resilient’.

He added: “As Cole Brothers in 1847, then as John Lewis, it has been a retail landmark in our city for decades. We also need to think about those staff who, after an already challenging year, now face more uncertainty. We will work to provide as much support as we can to those who may be impacted.

“It’s no secret that high streets across the country have faced challenges over the past decade, and no one could have prepared for the impacts of the global pandemic. But Sheffield is a resilient city, and we already have in place ambitious plans for a city centre that competes on a global stage.

“Our Heart of the City plans will deliver between 5,500 and 7,000 jobs, create social spaces, homes, showcase our incredible culture, deliver restaurants, workspace, creative hubs – with a focus on socialising, alongside a fantastic retail offering that supports new and existing businesses.

“There is a lot to look forward to in Sheffield and we’re already seeing great progress, with West Bar’s leisure and office spaces, Cambridge Street Collective’s cultural and entertainment hub, multi-million pound investment in the Moor and Fargate, and proposals for the 6,000ft Pounds Park, with a café, bar, terrace, water play area and urban orchard.

“We are already working towards building a world-class, sustainable, modern city centre that drives our economy and can continue to thrive long into the future.”

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Thank you. Nancy Fielder, editor.