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John Lewis to offer customers investment bond | |
(3 days later) | |
The department store John Lewis is hoping to raise £50m from customers and staff via its first retail investment bond. | |
The chain, which is the UK's biggest department store by sales, already offers some financial services such as credit cards and home insurance. | The chain, which is the UK's biggest department store by sales, already offers some financial services such as credit cards and home insurance. |
This will be the first opportunity customers will have had to invest directly in the firm. | This will be the first opportunity customers will have had to invest directly in the firm. |
John Lewis does not have shareholders as it is owned by its employees. | John Lewis does not have shareholders as it is owned by its employees. |
The bond, with a minimum investment of £1,000, will be available to 1.5 million cardholders and 70,000 staff. | The bond, with a minimum investment of £1,000, will be available to 1.5 million cardholders and 70,000 staff. |
It will be sold under the same brand as its credit card and be called the "partnership" bond. | It will be sold under the same brand as its credit card and be called the "partnership" bond. |
The launch of the bond comes ahead of John Lewis's 2010 results, which are expected to reveal the Partnership's profits rose 15% to about £350m. | The launch of the bond comes ahead of John Lewis's 2010 results, which are expected to reveal the Partnership's profits rose 15% to about £350m. |
Charlie Mayfield, chairman of the John Lewis Partnership which also owns Waitrose, said the idea was for the company to reduce its reliance on bank loans. | Charlie Mayfield, chairman of the John Lewis Partnership which also owns Waitrose, said the idea was for the company to reduce its reliance on bank loans. |
"The Partnership Bond issue is in keeping with HM Treasury's desire to develop non-bank lending channels to help improve macroeconomic resilience in the longer term," he said. | "The Partnership Bond issue is in keeping with HM Treasury's desire to develop non-bank lending channels to help improve macroeconomic resilience in the longer term," he said. |
It will pay a fixed interest rate of 4.5% in cash, payable for five years, with a maximum investment of £10,000. | It will pay a fixed interest rate of 4.5% in cash, payable for five years, with a maximum investment of £10,000. |
In addition it will pay a further 2% in John Lewis Partnership gift vouchers. | In addition it will pay a further 2% in John Lewis Partnership gift vouchers. |
Although the group has done better than its rivals in recent years, weekly sales figures since the end of January have suggested that customers are starting to spend more cautiously. | Although the group has done better than its rivals in recent years, weekly sales figures since the end of January have suggested that customers are starting to spend more cautiously. |
Its last profit figures, released in September, showed a jump of 28%, to £110.5m with the retailer's Waitrose supermarket and online operations reporting strong growth. | Its last profit figures, released in September, showed a jump of 28%, to £110.5m with the retailer's Waitrose supermarket and online operations reporting strong growth. |
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