British department store and supermarket chain, the John Lewis Partnership, said yesterday that it is to increase its investment in online food retailer Ocado.
JLP, which already holds a 40% equity stake in the company – previously known as Last Mile Solutions – is upping its extant £35 million investment to maintain its percentage holding in the face of Ocado’s £46m ($64.5m) rights issue. The retail giant is injecting a further £11m into the venture while co-backer, investment bank UBS, is also stepping-up its cash stake.
Ocado, founded by three former Goldman Sachs executives, plans to launch its service in London by the year end and roll-out across the UK within five years. Unlike its established rivals – Tesco, Iceland and others – Ocado is building its infrastructure from scratch and is currently constructing a 3000,000 sq ft distribution centre in Hatfield, initially to serve the London area but with capacity to extend to the whole of south-east England.
Ocado will trade under JLP’s supermarket brand Waitrose, which in turn hopes to expand the brand beyond its present south of England boundaries without the need for massive investment in bricks and mortar.
News source: Financial Times