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John Lewis boss explains Preston U-turn

John Lewis pulled out of Preston's Tithebarn development because the retailer could not find a way of making its planned store viable, according to managing director Andy Street.

The company confirmed last week it was withdrawing from Tithebarn leaving the £700m regeneration project without an anchor tenant.

Mr Street was speaking in Yorkshire where John Lewis has announced plans for a new store in York and confirmed its intention to press ahead with a flagship outlet in a new shopping development in Leeds which is now progressing after going on hold at the start of the downturn.

He told "Preston along with Leeds and a number of other cities were on the list in what you might call the good days before 2007.

"Similarly to Leeds the scheme there became unviable with the changed economic situation in 2008 and what has happened in Leeds is we have been able to re-plan and therefore we believe it is now viable again.

"In Preston we could not see a way of re-planning that with the developer which would make it viable in the long term. Eventually you have to say this isn't going to fly."

In the wake of John Lewis' decision, Preston City Council leader Peter Rankin has described the Tithebarn project as "financially unviable" and is now working with developer Lend Lease on a new mixed-use scheme.

Street said he expects Christmas trading to be "really challenging".

"Consumers have less money to spend than this time last year so what we are all having to do is fight for an increasing share of a smaller cake overall.

"Am I extremely confident John Lewis will get more than its fair share this Christmas? Yes I am and the reason for that is we have already done this over the course of the year so far.

"We are expecting our overall sales to increase by about 4% and in the environment I actually think 4% would be a good outcome.

"If you are looking for high profile casualties in the next couple of months that won't happen because this is the time when retailers make money. The real question is what happens in the leaner period of February onwards?"

Source : James Reed - The Business Desk North West

09 November 2011
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