📉 E-commerce Shutdown
KaDeWe, a luxury department store in Berlin, announced the closure of its online shop. This decision is part of the company's restructuring plan. Management said, "The e-commerce division cannot be continued profitably." The online shop, which promised to return "soon," will not keep this promise in the long term. Despite bold sale banners, a subtle note on the website states that orders are not possible, reflecting the impending shutdown.
📅 Employee Layoffs
As part of the e-commerce closure, 26 employees have been laid off. Most of these employees worked at the Berlin head office. They are scheduled to leave by the end of August. An agreement offers a "waiving bonus" of €1,500 ($1,600) to those who do not contest their dismissal. This move comes after KaDeWe's owner, the Thai Central Group, took full control following the bankruptcy of the previous owner, René Benko's Signa Group.
📊 Financial Troubles
KaDeWe Group, which includes Alsterhaus in Hamburg and Oberpollinger in Munich, has been struggling financially. The company went bankrupt in January, and its balance sheets, released after several years, show long-term financial troubles. The restructuring, led by Josef Schultheis since March, aims to stabilize the company. Online sales contributed little to overall revenue, prompting the decision to focus on brick-and-mortar stores.
🏬 Shift to In-Store Sales
The new owner, Central Group, believes the luxury segment thrives on personal shopping experiences. They are banking on the idea that luxury customers prefer in-store shopping over online. This strategy contrasts with typical retail trends, where e-commerce is growing. KaDeWe's move to shut down its online shop and concentrate on its physical stores is a significant shift in its business model, reflecting the unique dynamics of the luxury market.
Do you think KaDeWe's strategy will succeed?
