John Lewis Partnership, the employee-owned retailer, is facing backlash from multiple brands over the high fees it imposes for selling through its platform. As the company focuses more on e-commerce and adopts a partial marketplace model, it has been highlighting its partnership with new brands. However, a recent report by The Times reveals that John Lewis Chair Sharon White has sought Alix Partners’ assistance in renegotiating supplier contracts, which currently include fees and commissions that can reach up to 50% of every sale.

The exorbitant fees charged by John Lewis have garnered strong criticism from the CEO of a fashion label, who described them as “ridiculous.” Another supplier expressed disappointment, stating that John Lewis is already the most expensive option in the market and that the decision to increase fees only adds to their dissatisfaction. In fact, this supplier is even considering withdrawing their brand from the platform. On the other hand, two other brands have managed to negotiate lower rates with John Lewis. Additionally, Cornish fashion brand Seasalt has decided to sever ties with the department store chain for strategic reasons and will instead focus on its own webstore and collaborations with M&S and Next.

It is worth noting that commission rates vary widely across the retail sector, with Next and M&S charging a commission of 38% for third-party sales on their websites. In an effort to expand its offerings, John Lewis recently announced plans to onboard 100 new brands to its platform, allowing them to sell directly to consumers. However, the retailer has faced negative attention even before the pandemic due to the introduction of additional charges for online orders and returns.

This situation poses a significant challenge for John Lewis, which has experienced declining profits in recent years and is in desperate need of a turnaround strategy. The negative publicity regarding its high fees could potentially tarnish its reputation as a company renowned for its ethical practices. Moreover, it could undermine the company’s goal of attracting more online traffic by offering a diverse range of labels on its webstore.

Useful links:
1. John Lewis slammed by brands over exorbitant fees
2. Seasalt terminates partnership with John Lewis