Council chief reveals how Sheffield’s John Lewis will be refurbished – and which shops the city centre could have in future

An agreement to keep John Lewis in Sheffield that involved giving more than £3 million in public money to the retailer was ‘a deal any developer would do’, the council chief responsible for the city centre’s regeneration has said – while revealing the new pact has triggered a major review of the scheme's strategy for attracting occupiers.
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In August the John Lewis Partnership announced that it had agreed a 20-year lease, to run until 2040, with Sheffield Council on its branch in Barker’s Pool, incorporating plans for a refurbishment of the building.

The deal came shortly after members of the council’s cabinet committee approved proposals to retain the store in Sheffield as part of the £480 million Heart of the City II project – allowing the authority to buy out John Lewis’ long-term ‘nominal’ lease on its premises, enter into a new contract with a rent based on turnover, and give the employee-owned retailer money towards the cost of improvements.

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Details obtained from the council via a Freedom of Information request submitted by The Star later showed that the payment for buying John Lewis’ existing leasehold interest came to £3 million.

Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.
Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.

Speaking after the figure came to light, Nalin Seneviratne, the council’s director of city centre development, said the sum was ‘a fair price’.

“It was all properly and independently valued,” he said. “We had to make sure it was a deal any developer would do in the circumstances. It was a combination of the value of our interest pre-deal, the value of their interest pre-deal, the value of each other's interest post-deal and we kind of split the difference, basically.”

He confirmed that further payments will go to John Lewis to fund the refurbishment, on top of the £3 million spent on buying out the retailer's leasehold interest.

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"We've agreed a maximum figure, but the figure may be less than that, because they have got to do all their scoping. They will be looking at the way retail is going and saying 'How best do we merchandise this store? What does that mean for a fit-out contract?'”

John Lewis in Barker's Pool, Sheffield.John Lewis in Barker's Pool, Sheffield.
John Lewis in Barker's Pool, Sheffield.

The building was constructed in the early 1960s as a replacement for the old Cole Brothers department store on Fargate. John Lewis acquired Cole Brothers in 1940 and traded under the name in Sheffield until 2002 – under Heart of the City II’s failed predecessor, the Sevenstone scheme with developer Hammerson, the retailer would have moved to a new 260,000 sq ft shop on the site of the former Wellington Street fire station, but it opted to stay put as progress stalled following the 2008 recession.

The council, which is leading Heart of the City II alongside real estate specialist Queensberry, owns the freehold of the land in Barker's Pool, but John Lewis – which closed shops following the coronavirus lockdown amid falling profits – had a 99-year lease on the site.

“When people were building shopping centres all over the place, department stores traditionally were almost given a free deal, and there might have been a tiny rent,” Nalin said.

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"That was the anchor store that attracted all the other shops. We're not in that situation any more. We decided to get on with this scheme and leave them where they were, but we were able to do the deal.”

Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.
Nalin Seneviratne, Sheffield Council's director of city centre development. Picture: Andrew Roe.

He added: “At the end of the day securing John Lewis in the city quite frankly was a bit of a coup, especially when they decided to close Birmingham and Watford. Birmingham is their biggest shop of all.”

Sheffield’s, Nalin said, was ‘probably one of the most sustainable buildings they have got in their portfolio’.

"Because of the way the floorplates work it's all naturally ventilated – you can open the windows, it's a solid building in that sense. It's a good quality example of architecture of its day.”

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The revamp will mean the store looks ‘smarter and cleaner’ outside. New signs will reflect the retailer’s official name change to ‘John Lewis & Partners’.

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“It'll just get a good scrub up and updated signage, and maybe the shop fronts down the two sides might get a bit of a refresh. We've got the best part of a year in the planning, and the best part of a year in delivery. We're looking at roughly a two-year approach to see that sorted out.”

He accepted people would have ‘different views’ of the deal, but emphasised the ex-Cole Brothers shop was ‘very much an institution in Sheffield’ and a prime driver of city centre footfall.

“It's circa 500 jobs that are in that store and therefore four or five hundred families – mainly Sheffield families – that are being supported on the back of all that.”

There were further benefits, he said.

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“Up until now we've never been able to say, with any certainty or confidence, what's happening with John Lewis. All the other retailers want to know. Now we can say we've signed a new 20-year lease, they've got a refurbishment planned. For the retailers we want to attract, that's now a key position for the city. The fact they have voted with their feet to stay in Sheffield, keep that open and refurbish it, is a big thing for other retailers.

“On the back of that position, we'll be reviewing the leasing strategy – now that it's nailed down, who are the ones that complement John Lewis, and seek that blend of operators that are across the country but aren't here, and independents.”

Uniqlo – a popular Japanese clothing chain that has its only UK shop outside southern England in Manchester – was ‘the sort of outfit’ Heart of the City II could target, said Nalin, who cited Zara as another global fashion retailer worth pursuing for the city centre.

“Edinburgh and us are probably the only other schemes that are coming out of the ground,” he said. “The private sector couldn't make it work, because the private sector needs that profit margin in order to do it. If in Sheffield we took that view, all we will see is more student residential going up.”

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Elsewhere in Heart of the City II, the city’s new 154-bedroom Radisson Blu hotel on Pinstone Street has a projected opening date of early 2023 – “Given where we are with Covid-19 the timing is OK,” said Nalin – while there have been 10 bids, mainly from Sheffield operators, expressing interest in the block that involves reviving the Little Mester’s workshops at Leah’s Yard on Cambridge Street.

“That Sheffield independent scene is what we want there,” said Nalin. “That block as a whole, if you're a tourist or visitor to Sheffield, you'll want to go there.”

Enquiries are still coming in for Heart of the City II’s office space ‘despite all the tales of woe’, he said, describing how he recently showed a London-based firm around the development. “They're thinking 'We want to spread out into the regions'. I think we'll see some movement out of London.”

Additionally, a rebrand of the mixed-use scheme’s website and marketing materials is on the cards.

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“One of the challenges in terms of attracting occupiers and retailers is there's of people out there who just don't understand Sheffield,” said Nalin.

"The city centre for so many years was in the doldrums and Sheffield city centre hasn't got the breadth of offer that other comparable cities have. A lot of those operators that are elsewhere don't really know Sheffield because of that gap that's been there for so long.

“A big thing is describing and selling the city as well as the scheme, and therefore the two go together.”

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