May 22, 2023
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Sainsbury's to embrace third-party fashion brands - report

May 22, 2023

​Supermarkets giant Sainsbury's is making a major bid to up its already strong fashion game as it seeks more third-party brands to sell online and in-store. 


The company is aiming to build a new online marketplace along the lines of those operated by retailers such as M&S, Next and John Lewis

And while the first two of that trio are riding high on the back of such a business model, John Lewis is struggling and Sainsbury's forging links with third-party labels could take advantage of those struggles (and place even more pressure on John Lewis in the process). 

The Sainsbury's plan was reported by the Sunday Times, which said that Britain's second largest supermarket chain has been speaking to clothing brands about the concept, which would see it selling those labels on its website, but also in up to 60 of its larger stores.

And those larger locations certainly have plenty of space for fashion. In many of them, the space allocated to its existing Tu clothing brand is much, much larger than that of many monobrand clothing stores already. 

The newspaper said it has learnt from industry sources that the company has already approached brands including Jigsaw, White, Stuff, and Yours Clothing.

The move is no surprise given how important clothing sales have become to supermarkets in recent years, and particularly given that the Sainsbury's offer already has a large share in the UK clothing market. The fact that the non-food operation is run by Paula Nickolds, who previously ran John Lewis, makes it even less surprising. The company has also had another former John Lewis senior manager, Christine Kasoulis, as its director of clothing, home and furniture since last year.

The opportunities for large retailers to make money from selling third-party brands and to help them grow bigger in a fiercely competitive market have not been lost on the major players in the market.

Next has already shown its strength and is one of the key operators in this area, selling hundreds of such brands on its marketplace. M&S meanwhile has taken a more curated approach to the brands that it sells, but this area is still increasingly important to it and has played a part in its recent recovery. 

As mentioned, this leaves John Lewis vulnerable at a time when it's trying to turn around its business. Given that it also charges some of the highest commission rates (reported to be at least 40%), the lower rates offered elsewhere are likely to be extremely attractive to brands and Sainsbury's is well aware of this. 

It has already struck deals to sell FatFace and Sosandar both online and in-store. And earlier this month it announced the launch of two exclusive own-brands, Everbelle and For All The Love.

While some brands might be averse to the idea of selling in a supermarket, the look and feel of the most modern and largest Sainsbury's stores is far removed from the old idea of supermarket fashion aisles so it will be interesting to see how this develops. 

Sainsbury’s hasn’t commented on the report so far and we’re unlikely to hear anything until we start to get official announcements of brands that have signed up.

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