With Peek & Cloppenburg, a name rich in tradition has once again entered insolvency proceedings in self-administration in order to restructure itself. The fashion house from Düsseldorf joins an illustrious group: Adler Modemärkte, Escada, Esprit, Orsay, Sinn are the names of previous cases from the clothing industry that have fallen into difficulties in recent years. Salamander and most recently Görtz from the shoe trade are added, and then there is the long-term patient Galeria, the ailing department store chain, which is currently undergoing its second protective shield procedure in a short time.
The external circumstances and how they affect the business have the traders in common: After the privations of the Corona crisis, when their shops had to remain closed by official orders, high inflation and the uncertainty caused by the war in Ukraine are currently taking full effect. Many potential customers keep their money together or spend it elsewhere on things they missed more than shopping, holidays, for example.
How attractive is the city?
The lack of attractiveness of city centres is also repeatedly cited as a threat to retail, a mutually reinforcing effect: shops remain empty or move out, which in turn weakens the attraction. In addition, cities and municipalities are increasingly banning cars from the city centre in the fight against climate change without being able to offer reasonable public transport services. The result: Quite a few dealers complain about a car-hostility of the cities, many customers do not live in the metropolitan area and shy away from elaborate trips into the city, if the package is also delivered to the front door.
However, it is also true that it is never only the external influences that have brought traders into trouble. At most, these exacerbate the misery of a brand that is already under pressure. After all, there are enough retailers who can assert themselves with all the difficulties of the inner cities exactly there, because they know their target group well, address them and lure them there. The Cologne-based jewelry retailer Icrush, for example, was more local and small until the pandemic, but then consistently expanded its online business and addressed customers every evening with livestreams on Instagram. Marketing with influencers is now part of the standard construction kit of almost all retailers.
Of course, this works better with some brands than with others, which is also related to the reputation – traditional companies sometimes have a harder time despite their popularity. Meanwhile, Icrush has stores in high streets in Cologne, Munich and Frankfurt, but continues to rely on social media as a sales channel.
Anyone who shops stationary also wants to be advised
Other stores hold up well because they offer a shopping experience that has advantages over online stores, whether through special advice or a certain exclusivity – which, by the way, does not necessarily have to be luxury. Of course, the discount and luxury segment are more likely to benefit in times of crisis, because some have to pay particular attention to money, while others are not affected by the worries. As a result, the price ranges in the middle segment will come under greater pressure.
But here, too, the following applies: This alone does not completely destroy any business, there are also home-made difficulties. Department store chains such as La Rinascente in Italy, which is owned by a Thai investor but has built up a local department store experience at the respective locations with different, separate brand identities in the store, which Galeria can only dream of, show how it can be done better. Also in terms of customer loyalty. Breuninger from Stuttgart is such a similar case, the fashion house has so far been very comfortably steered through the crisis period, which is also due to the fact that it is consistently present in online trading and has built up market shares there when the stores were closed.
The imbalance of big names such as P&C in Düsseldorf and Galeria is also due to management errors. Bosses were constantly changing, online strategies were not consistent. However, inertia, which stems from the "we are known" self-image, has also contributed to the crisis. Their size and importance for suppliers, landlords and cities now give P&C and Galeria at least a certain bargaining chip in debt relief. But this is not a business model for the future.