Department store giant John Lewis has launched its first ever ‘buy now, pay later’ offer online to help satisfy a surge in demand for interest free credit.
The move comes as partnership chairwoman Sharon White takes action to turn around the fortunes of the department store. Home, garden furniture, lighting and nursery products are covered as well as fitted kitchens and bathrooms.
Customers will be able to sign up for at least £1,000 of credit with a maximum of £25,000 for 12 months. Credit for fitted rooms will amount to up to £35,000.
A good sign?: Customers will be able to sign up for at least £1,000 of credit with a maximum of £25,000 for 12 months
John Lewis has brought in French banking giant BNP Paribas to help launch the service. It promises ‘no arrangement fees or hidden extras’.
Rival Marks & Spencer last week hinted that it may soon offer its own consumer credit option. White launched a massive review of the company after her arrival last February from her previous role as chief executive of Ofcom.
She has committed £400million to expand in areas where the company is under represented. She also wants to generate 40 per cent of future profits from ‘non-retail’ – including financial services – by 2030. The store began offering home insurance earlier this year.
A John Lewis Partnership spokeswoman said: ‘We’re making it easier for customers to pay the way they want – obviously in a responsible way.’
A source said: ‘People genuinely trust John Lewis. Financial services, credit and insurance are where trust is important and this could guide where they go next.’
The rapid rollout of the new credit option will be regarded as a reaction to the success of credit offers from the likes of Klarna and Clearpay. Last week, Klarna said it has raised $1billion (£720million) of new funds amid rapid growth. The Swedish firm said it is now valued at $31billion making it the most valuable fintech firm in Europe.
Buy now, pay later schemes exploded in popularity last year when lending from them tripled to £2.7billion as store closures drove sales online.
Next has run a large and profitable credit operation through its Directory business for decades.
The John Lewis Partnership – which also owns Waitrose and operates its own credit card – has offered credit in its John Lewis shops since 2013, but never before online.
Its online sales have soared during the pandemic. It is expected to announce further store closures as soon as this week.
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