John Lewis is facing a backlash over third-party brand fees
John Lewis is facing a backlash from third-party brands over a proposed 50% fee to list brands on its marketplace.
Last week it was announced that John Lewis would launch 100 new third-party fashion brands in the next year, allowing labels to supply their products directly on johnlewis.com for the first time.
However new reports reveal that John Lewis has enlisted consultants at Alix Partners to renegotiate its contracts with brands, which would result in them paying up to 50% of every sale in commissions and fees.
According to The Times, fashion brand Seasalt has walked away from its deal with John Lewis for “strategic reasons” to focus on its own channels and its partnerships with Next and Marks & Spencer.
Another brand CEO told the newspaper he was "flabbergasted" at the fees. “They are 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,” he said.
Next charges around 38% commission to sell on its website, while Marks & Spencer, which is also supercharging its third-party brand offer, is understood to charge a similar amount.
Next has a long-established third-party brand business, while John Lewis and Marks & Spencer are moving into the marketplace space as the traditional department store model comes under pressure.
M&S has said it has no intention of creating a department store online but will be adding a tight line-up of complementary brands, which so far include names such as Seasalt, Hobbs, Joules, Sosandar and Nobody's Child.
New brands arriving at John Lewis shortly include plus-size lingerie brand Oola and menswear brands such as Raging Bull and Spoke London. In all some 40 new brands are expected to be added to its line up in the next six months.
In response to the reports about Alix Partners' review, John Lewis said: “The review looks at a range of themes such as marketing and shop space, as well as fees. We build trusting and fair relationships that benefit John Lewis and our suppliers.
“In the last six months, we’ve introduced 90 new Fashion brands, which demonstrates that we are an attractive partner to our suppliers.”