John Lewis Partnership’s pension assets dropped by £2.8bn in value last year as pressure continues to pile on the retailer.
The partnership, which comprises John Lewis and Waitrose, said the value of the assets fell to £4.42bn from £7.23bn at the year-end on 28 January.
According to the Times, the sharp decline was largely driven by a drop in the value of liability-driven investments designed to hedge interest rates and inflation risks but which slumped after Kwasi Kwarteng’s disastrous mini-budget last September.
At the end of the year, the retailer's pension fund swung to a deficit of £69mln from a surplus of £474mln.
To ensure suitable liquidity within the trust’s assets, the interest rate and inflation hedge were cut from 100% to 75% of assets, according to The Times, although the trustee is reportedly in the process of raising this towards the 100% target.
The retailer, which recently posted an annual loss before exceptional items and tax of £78mln, has also been facing intense criticism over its plans to shake up its ownership model.
Chair Sharon White is in the early stages of exploring a change to the retailer’s mutual structure so it can try to raise between £1bn and £2bn of new investment.
The group would consider selling only a minority stake and its priority would be to maintain majority employee ownership, the newspaper reported.