The John Lewis Partnership is plotting the takeover of a fast-growing recipe box provider backed by the former Wimbledon champion Sir Andy Murray as it seeks to tap into consumers' post-pandemic penchant for subscription services.
<p>Sky News has learnt that Waitrose is in detailed negotiations to buy Mindful Chef, which provides meal-kits to thousands of customers and has seen sales explode during the <a href="https://news.sky.com/topic/coronavirus-8483" target="_blank"><strong>coronavirus</strong></a> crisis.</p><p>This weekend, it emerged that Waitrose, the supermarkets division of Britain's best-known retail mutual, is facing competition to acquire Mindful Chef from Nestle, the consumer goods behemoth.</p><p>A takeover of the five year-old company would represent a bold step for Waitrose, whose parent company has launched a strategic review that will define its future on Britain's high streets.</p><p>John Lewis, its department store business, has announced the <a href="https://news.sky.com/story/coronavirus-john-lewis-to-axe-1-300-jobs-as-eight-shops-close-12024669" target="_blank"><strong>closure of eight outlets</strong></a>, triggering the loss of more than 1000 jobs.</p><p>The decision to shut its Birmingham store sparked a public row with Andy Street, the West Midlands mayor who previously ran the chain.</p><p>Under Dame Sharon White, the JLP chair, it has promised to take a radical approach to ensure it can emerge from the structural changes reshaping the UK retail industry.</p><p>Waitrose recently announced the launch of a <a href="https://news.sky.com/story/coronavirus-waitrose-to-trial-groceries-on-deliveroo-as-pandemic-accelerates-changes-to-retail-12058344" target="_blank"><strong>partnership with Deliveroo</strong></a> to make more than 500 products available to customers within as little as 30 minutes.</p><p>Like Britain's other major supermarkets, Waitrose has seen an explosion in online orders since the country went into lockdown in March.</p><p>Its long-running relationship with Ocado has just come to an end, obliging it to seek new ways of forging ties with shoppers.</p><p>Both Waitrose and John Lewis have appointed new managing directors, while the partnership is seeking a seasoned retailer to work with Dame Sharon as the partnership's deputy chair.</p> <p>Announcing the first phase of its strategic review in July, Dame Sharon said in relation to Waitrose: "Outside of their regular grocery shop, we also know that our customers are spending a lot on food delivery services.</p><p>"We see significant scope for us to grow in this area, and are actively exploring early opportunities."</p><p>She added that JLP would "create partnerships with other businesses who respect our ethos and can bring resources or capabilities we don't have".</p><p>She added: "We are already in a number of commercial discussions and are also looking at acquisitions."</p><p>The cost of a deal to buy Mindful Chef outright was unclear this weekend, with some sources suggesting it could be between £35m and £50m.</p> <p>JLP is understood to have drawn up plans to finance such a deal, although the details are uncertain.</p><p>One former employee, said it was questionable that it was considering spending tens of millions of pounds on an acquisition at a time of substantial layoffs from its 80,000-strong workforce.</p><p>Some retail executives believe the soaring sales trajectory enjoyed by meal-kit providers during the <a href="https://news.sky.com/topic/covid-19-8518" target="_blank"><strong>pandemic</strong></a> is not sustainable over the longer term.</p><p>However, people close to JLP said that Mindful Chef was "exactly the sort of deal it should be looking at if it wants to survive".</p><p>Mindful Chef was established five years ago by a trio of Devon school friends, and markets itself on its supply of fresh meat, fish and produce sourced from independent UK farms.</p><p>The company sends weekly healthy recipe boxes, filled with recipe cards and pre-portioned ingredients to its subscribers.</p><p>To date, it has sent more than 8-million meals to about 145,000 customers.</p><p>It raised money from <a href="https://news.sky.com/topic/andy-murray-5928" target="_blank"><strong>Sir Andy</strong></a> and his fellow Olympic champion, cyclist Victoria Pendleton, in a crowdfunding round in 2016.</p><p>Last year, it sold a £6m stake to Piper, a private equity firm specialising in investments in branded consumer businesses.</p><p>Mindful Chef said on Saturday: "In May this year, healthy recipe box brand Mindful Chef, announced it was commencing its Series B round of fundraising, under the direction of KPMG.</p><p>"The direct-to-consumer business has reported an unprecedented increase in sales since the coronavirus outbreak, including a +452% spike in new recipe box customers and a +387% spike in frozen meal sales (based on sales week on week)."</p><p>It said it anticipated seeing full-year sales more than treble from £16m last year to £50m in 2020.</p><p>"Mindful Chef can confirm that on the back of its successful results there has been a great deal of interest," the company added, saying it could not identify its suitors.</p><p>It said the fundraising process "is still progressing and no party is in exclusivity".</p><p>Insiders expect a deal to be concluded within weeks.</p><p>LDC, the private equity arm of Lloyds Banking Group, is also understood to have been in contention to buy the recipe box provider.</p> <p><strong>:: Subscribe to the Daily podcast on <a href="https://podcasts.apple.com/gb/podcast/sky-news-daily/id951048357?mt=2" target="_blank">Apple Podcasts</a>, <a href="https://podcasts.google.com/feed/aHR0cHM6Ly93d3cuc3ByZWFrZXIuY29tL3Nob3cvMzI4NzI0Ni9lcGlzb2Rlcy9mZWVk" target="_blank">Google Podcasts</a>, <a href="https://open.spotify.com/show/3RdXZrbbG3NydLsPYmRSJy" target="_blank">Spotify</a>, <a href="https://www.spreaker.com/show/sky-news-daily" target="_blank">Spreaker</a></strong></p><p>A spokesperson for the John Lewis Partnership said this weekend: "We don't comment on commercially sensitive matters.</p><p>"We're conducting a strategic review, and as part of that we're considering a number of commercial opportunities."</p><p>Nestle declined to comment.</p>