John Lewis will still owe us money if it closes says Sheffield City Council

John Lewis will owe Sheffield Council money if they close the store and there will be no financial loss, the authority said today.

Wednesday, 24th March 2021, 6:03 pm

The council said there would be no direct financial loss to the local authority which still owns the building and the site.

A spokeswoman said the deal last year saw the council pay £3 million to John Lewis for the surrender of the existing lease, which had a term of 42 years remaining at a nominal ground rent.

It then entered into a new 20-year modern lease for the building in return for a turnover-based rent.

Sign up to our daily newsletter

The i newsletter cut through the noise

John Lewis announced the closure of its Sheffield store this week.

She said that John Lewis was still tied to the lease agreement and a payment would be due to bring that to an end.

Nalin Seneviratne, Sheffield City Council’s Director of City Centre Development said:

"John Lewis has always been a part of our plan for the regeneration of the city centre. If circumstances did change, any change to the lease would need our agreement. John Lewis may plan to close the store, but they are still tied to a lease with The Council. If they want to bring that arrangement to an end there is a commercial arrangement to be agreed between the parties with a payment due from John Lewis.

Heeley MP Louise Haigh: "This will be a hammer blow for Sheffield and leave a gaping hole in our city centre."

“Whatever agreement is reached, The Council have the benefit of the building and the overall site in the centre of the City. There will be no financial loss to the Council.”

The decision to close the John Lewis store in the centre of Sheffield, which was at the heart of a £480 million regeneration project, has been described as a “hammer blow”.

It is only six months since Sheffield City Council agreed a multimillion-pound deal with the department store company to restructure the lease of the landmark 1960s Cole Brothers building, opposite City Hall and the war memorial.

The deal, which included plans for a major refurbishment of the Barker’s Pool store, was struck after the site was confirmed as a lynchpin of the Heart of the City II scheme – an ongoing £480 million investment in a fundamental regeneration of Sheffield city centre.

Following the decision on Wednesday, Sheffield Heeley Labour MP Louise Haigh said on Facebook: “This will be a hammer blow for Sheffield and leave a gaping hole in our city centre.

“John Lewis is a huge draw, and the closure will have a knock-on effect for businesses across Sheffield.

“We can’t continue with a situation where five US tech firms account for £1.3 billion in lost corporation tax every year, while high street shops pay business rates under a system that hasn’t been reformed for years.

“The Government are washing their hands of any responsibility for reviving our high streets, and creating a level playing field for local businesses. It’s the communities and workers who rely on them that are paying the price.”

At the time of the agreement over the lease in August last year, Mazher Iqbal, cabinet member for business and investment at Sheffield City Council, said: “Securing John Lewis in the city centre has been one of our key long-term ambitions, so we’re delighted to get a deal done – particularly during a difficult time for the high street on a national scale.”

On Wednesday, Nalin Seneviratne, the council’s director of city centre development, said: “The planned closure of John Lewis is sad news.

“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, multimillion-pound investment in the Moor and Fargate, and proposals for the 6,000ft Pounds Park, with a cafe, 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.”

Sheffield City Region Mayor Dan Jarvis said: “Losing John Lewis in Sheffield deals another blow to retail workers who are among those who have been hit hardest by the pandemic.

“My heart goes out to the workers and their families whose livelihoods are at risk.

“The store has been a cornerstone of the city’s retail offer for more than a century. I am working with John Lewis and Sheffield City Council to determine what this means for those whose jobs are now on the line and what can be done to support them.”

Mr Jarvis said an £860 million stimulus package had been agreed earlier this week to start the recovery of South Yorkshire’s economy, which includes £300 million to “transform our places and high streets”.

The John Lewis store is also just a few hundred metres from the Debenhams building, which suffered a similar fate in December.