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Department stores defy call to lower commission fees

Department stores defy call to lower commission fees

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Published : 2013-12-18 20:02
Updated : 2013-12-18 20:02

The nation’s department stores and home shopping operators collected high commissions from their shop vendors or subcontractors this year despite government calls for reductions, data indicated Wednesday.

Seven major department stores including Lotte, Hyundai and Shinsegae were found to have received an average 28.5 percent commission on their contract retailers’ sales, the Fair Trade Commission said.

The average figure is a decrease of 0.1 percentage point from a year earlier. The government has called on department stores and other retail giants to lower their commission fees as part of its policy for shared growth.

Lotte Department Store topped the list with a 29.5 percent commission rate, followed by Hyundai with 28.6 percent, and Shinsegae and Galleria each with 27.8 percent. DongA charged the least among the seven with 25.2 percent.

Notably, the commission rate differed somewhat by the subcontractor’s nationality or business scale.

Small and mid-sized enterprises had to bear the burden of an average of 28.2 percent commission, while department stores fees on foreign premium brands such as Cartier, Bulgari and Hermes stood at 22 percent.

Aside from commission charges, SME suppliers shoulder interest-free installment plan costs and other expenditures such as studio set costs.

Six major home shopping operators charged a higher commission on TV channel retailers at 34.4 percent on average.

CJO Shopping charged 36.7 percent, followed by GS with 37.9 percent, Hyundai with 36.6 percent and Lotte with 35.2 percent.

Home shopping operators have argued that commission charges include broadcast fees paid to cable television broadcasters, and that the actual commission charges stand at around 20 percent.

By Kim Yon-se (kys@heraldcorp.com)

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