John Lewis launches supply chain review

21 June 2021

John Lewis has launched a strategic review of its supply chain and procurement processes as it looks to save costs.

The department store chain has reportedly brought in consultancy AlixPartners to carry out a supply chain review that will include looking at intake margins and supplier terms.

A John Lewis spokesperson told SM: “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.”

One aim of the review is to evaluate whether simplification and efficiencies can save variable costs, according to Drapers.

Brands have hit out at the retailer, claiming the fees John Lewis charges them to stock their products are “ridiculous”, according to the Sunday Times

Suppliers have complained they pay John Lewis up to 50% of every sale in commissions and fees.

It said the Seasalt fashion brand had pulled its goods out of John Lewis and decided to push them in Marks & Spencer and Next instead.

Two other unnamed brands had managed to negotiate discounted rates, the paper added. 

The retailer is reported to be under threat from online competitors with lower overheads than bricks and mortar stores.

In March John Lewis announced it was targeting annual cost savings of £300m and would not reopen eight of its 42 stores after lockdown restrictions were eased.

John Lewis Partnership made several senior appointments in March.

This included bringing in Stephen Spencer, currently director real estate, store development and strategic sales at athleisure brand Lululemon, as “store of the future” director.

Spencer’s role is partly to look at how to react to a changing retail environment.

In June 2020 Pippa Wicks, former managing director at AlixPartners, was appointed executive director at John Lewis.

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