John Lewis slammed over fees charged to third-party brands
Employee-owned retailer John Lewis Partnership has been criticised by a number of brands because of fees it charges labels to sell through John Lewis.
The company has been talking up the addition of a large number of new brands in recent periods as it evolves to a business with a heavy focus online and adopts a partial marketplace model.
The Times reported that John Lewis chair Sharon White has brought Alix Partners on board to renegotiate supplier contracts. These contracts see brands paying John Lewis up to 50% of every sale in fees and commission.
The unnamed CEO of one fashion label said he was "flabbergasted" when already “ridiculous” fees were raised.
The supplier said John Lewis is “already the most expensive in the market. To do that after the year we’ve had was very disappointing. We are seriously looking at pulling out”.
Two other unnamed brands said that they've negotiated discounts to their rates with John Lewis while Cornish fashion brand Seasalt said it has cut ties with the department store chain for “strategic reasons” and will focus on its webstore deals with M&S and Next, as well as on its own website.
Commission rates vary widely across the retail sector and the Times said Next charges a commission of 38% to sell on its website while M&S charges a similar rate, after having entered the third-party arena only last year.
John Lewis recently announced that it would allow 100 new brands to list on its website and sell directly to consumers. The newspaper also said that it upset some brands before the pandemic by adding extra charges for every product ordered via its website and for every return.
John Lewis is itself in a difficult position having seen its profits falling in recent years and having an urgent need to turn itself around. But negative publicity surrounding the fees its charges could also be something of an own goal for a company that relies very much on its ethical image and that wants to attract maximum traffic to its webstore by offering an attractive selection of labels.
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