Thebankruptcy of Karstadt, the end of Bread & Butter, and the entry of Chinesecompanies were some major headlines that dominated in Germany, writes
Both a plethora of problems and anumber of new developments made the fashion headlines in 2015. The exhibitionlandscape changed significantly, and retail continues to be challenged by theever-growing relevance of e-commerce. And while classical retail is trying tostabilise its business, online giants are battling against each other.
The bankruptcies
Almost a permanent fixture in theheadlines was department store group Karstadt. The bankruptcy of the Arcandormother company, which itself went insolvent six years ago, will still take"many years" to find its footing again, the liquidator said inNovember, according to the German Press Agency. The reasons were mainlylitigations, including those against numerous former managers of the group,like former top executive Thomas Middelhoff. In all, 37,500 creditors areasking for €1.2 billion, according to the report of the liquidator. At the sametime, reports of real estate sales of Karstadt stores have been coming in.
Also, Escada struggled through theyear. In July, the fashion label announced that it would have to cancel about200 jobs in the next two years. At the company's headquarters in Munich, some150 employees had to go. The job cuts are part of a restructuring programme,which is aimed to reposition the company since the departure of former CEOBruno Salzer.
Berlin
exhibition landscape
Despite the loss of Bread &
Butter, which was the strongest event in the Berlin trade fair scene some years
ago, the city presented a fragmented, but lively exhibition scene. Panorama and
Premium especially have won and further developed their respective profiles. In
July, the premium operators reported an increase in visitors of 70 per cent on
the first day itself. Panorama will enlarge its area in next January by about
3,000 square metres. The sale of skate-and-streetwear fair Bright to the
Premium fair was welcomed with excitement. With the acquisition of all shares
of Bright-founders Thomas Martini and Marco Aslim, Bright merged with the Premium
sub label Seek. In summer, both events took place in the same location for the
first time, and the response was positive. In addition, quite a number of other
specialised trade fairs were organised in Berlin: Show & Order, Berlin
Fashion Salon, Green Showroom, Ethical Fashion Show and of course Berlin
Fashion Week, among others.
Clash of
the online titans
The growing e-commerce business
dominated the news landscape considerably. Not only did online giant Zalando
demonstrated a remarkable pace and launched its exclusive distribution deal
with Topshop and Gap this year, the announced sales target at the end of the
year was €3 billion. The competition from abroad is already started. Uniqlo
went online in Germany this year, while Alibaba opened a branch here. To start
with, Alibaba will help conquering the Chinese market for local traders, the
company said. But for the future, the German market shows potential too. This
is the strategy of the Otto Group which has a joint venture with Chinese online
marketplace JD.com. In return, JD.com will invest in Zitra GmbH, a subsidiary
of the Otto Group. The 50:50 joint venture has been designed to enable
international brands to break into the Chinese market, or increase their own
sales on JD.com and other online marketplaces worldwide. Thus, JD.com is a new
global competitor to Amazon. Amazon, on the other hand, announced its intention
to enter the fashion market with six of its own brands, but at the moment this
would only be in the US. Even more interesting are Amazon's new logistics
solutions. Amazon is offering same-day delivery in Germany for the first time,
and even drones will carry packets in the future. Many doubt the feasibility of
this idea, though drone delivery is being tested in some areas by Deutsche
Post.
Price wars and international implications
Discounts without end: that's the
summary of the year 2015. Difficult weather conditions last winter had caused
lower turnovers and resulted in a sales battle. And the same seems to be the
forecast for this winter. Moreover, the discount wars of Black Friday and Cyber
Monday have been recognised by large numbers of German consumers for the first
time this year. More than ever, brands and retailers have taken the opportunity
to reduce their stocks before Christmas. In Germany alone, about a quarter of
German online retailers participated. Experts expected a sales growth of 16.8
per cent from the previous year for the Black Friday weekend and online
revenues of a total of €924 million.
Meanwhile, Swiss
companies have felt the full brunt of its currency reform this year. After the
surprising decision of the Swiss National Bank in January to lift the minimum
euro exchange rate with immediate effect and to decouple the franc from the
euro, many Swiss retailers suffered from a declining demand. Especially in the
border regions, consumers preferred to shop in cheaper Austria, Italy or
Germany. The price transparency of the Internet amplifies the shopping in
foreign online shops. At the same time, the brands reacted with price
adjustments. So, luxury goods house Richemont and watchmaker Swatch announced
price increases in the euro area, with market leader Rolex going up to 14
percent.
The Russian embargo caused many
problems as well. Brands such as Escada and Laurel or the Ahlers AG with its
brands Pierre Cardin and Baldessarini, which are traditionally strong in
Russia, suffered heavy losses.
And there was another topic too, which was quite ubiquitous, especially in the fashion media. The large quantities of refugees in Germany and Austria led to an incredibly high number of events and actions to help them. Many brands and retailers donated clothes and shoes or even collected money for them.
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