What future perspectives do traditional department stores have? Many once well-known names have disappeared from Germany's city centres in recent decades. The golden age of department stores came to an end already in the 1970s. Competition from new stationary retail concepts and the booming online trade of recent years has put pressure on the "all under one roof" concept. The pressure on turnover and profitability has especially increased enormously.
Is the department store business model, which has been in existence for more than 100 years, still competitive in 2021? What potential do abandoned department store properties offer? We investigated these questions in our study “Bringing department stores back to life”.
Result: Only a maximum of 50 percent of the department stores currently in existence have long-term prospects without a change of concept. This puts pressure on all parties involved – owners as well as affected cities. But this development also holds opportunities.
In search of future potential for former department store buildings, we analysed promising transformation measures. Our goal was to find success factors for the quality of city centres. We also looked at the economic aspects of building transformation.
Our analysis shows that conversions into multi-purpose buildings with high occupancy rates, stable cash flows and suitable options for third party use are particularly successful. Conversion requires clear concepts, strong brands and the early involvement of municipal planning authorities.
Click here to access our study Bringing department stores back to life.