A triple-header of major store events has seen the German department store chain taking rapid strides towards modernizing and differentiating its business as outlined in the "Karstadt 2015" strategic plan. Reflecting the group's multitiered structure, the moves have been made on both upper and midmarket levels. The consistent message, however, has been one of trading up and, to some extent, cleaning out.
Prior to the grand opening of KaDeWe's new Luxury Boulevard, the store's revamped beauty department and the third-floor The Loft with a 21,500-square-foot shoe salon, Karstadt chief executive officer Andrew Jennings met with WWD here to outline where the group is and where it's going.
Jennings has been at the Karstadt helm for 20 months, brought in by investor Nicolas Berggruen, who rescued the group from Germany's largest postwar insolvency in 2010. "He hired me to reposition three businesses: the premium group [three doors], the department store group [86 doors] and the sports division," Jennings said.
While the core department stores clearly required the most attention, even the group's jewel — the premium flagship KaDeWe — needed to sharpen its profile.
"If you don't stand for something, you stand for nothing," Jennings declared.
The second-largest department store in Europe, "KaDeWe has an unbelievable location and great traffic flow with 200,000 people coming through the doors weekly," he said. Despite a 2004 upgrade that installed a boulevard of luxury accessories shop, he contended, "It was still a provincial store. Our focus now is to be international."
Making KaDeWe the shoe destination "not only in Berlin but in Germany," was a top priority for Jennings, who introduced Saks Fifth Avenue's eighth-floor shoe department during his tenure there. Points of reference were Barneys New York, Selfridges and Harrods. While the business in Berlin might not be as large as those examples, KaDeWe's new footwear setup is uncommonly spacious in design, and takes up more than 30 percent of The Loft, as KaDeWe's entire third floor is now called.
Miu Miu, Prada, Ferragamo, Tory Burch, Mulberry, Dior, Chloé, Jimmy Choo and Yves Saint Laurent are among the brands whose boutiques create an airy network of individualized living room environments. Diane von Furstenberg, Kurt Geiger (a German exclusive), Repetto, Unützer, and Fendi are among the other new shoe collections introduced at KaDeWe this season, and also in the pipeline are Giuseppe Zanotti, Rachel Zoe, United Nude and Nine West, to name a few. "I think we'll quadruple our shoe business. We will be a force to be reckoned with," Jennings said.
Handbags are The Loft's second main emphasis, with shops from Aigner, Burberry, Chloé, MCM, Michael Kors and Ferragamo, as well as selections from Alexander Wang, Anya Hindmarch, Loewe, Kate Spade (another German exclusive) and Victoria Beckham, among many other labels. Also to be found on the floor: a concentrated lingerie assortment, including a new shop from Agent Provocateur, and high-end children's wear.
Long a work in progress, KaDeWe's main floor has been fully upgraded, the traffic flow streamlined in the process. Joining shops from Bulgari, Chopard, Gucci, Hermès, Montblanc, Omega, Prada, Rolex, Tiffany and Wellendorff on the 43,000-square-foot Luxury Boulevard are refurbished and, in some cases, expanded spaces from Chanel, Dior, Fendi, Louis Vuitton, Miu Miu and Tod's, plus new entries by Celine, Longchamp, Vertu and Yves Saint Laurent.
The 32,400-square-foot beauty department was rearranged and slimmed down by about 1,075 square feet, but gained a host of new luxury and niche brands, many exclusive, and 80 counters got new furnishings. Some notable newcomers: By Kilian, Byredo, Agonist and Blood Concept fragrances; Bare Mineral, Eve Lom and By Terry skin care; Deborah Lippmann and Spa Ritual, and premium hair care brands Philip B. Truffle by Fuente and MiriamQuevedo.
The main focal points, however, are the first (and only) full Tom Ford cosmetics counter in Germany, and Chanel and Dior's mega-counters, each with a gross floor space of 1,200 square feet. Located adjacent to their brand's shops in the Luxury Boulevard, they provide a fluid segue between beauty and fashion.
KaDeWe has renovated over 172,000 square feet of floor space in 40 weeks, and there's more to come. Karstadt hasn't released sales figures since the insolvency proceedings, but Jennings acknowledged, "We're absolutely making money there [at KaDeWe]. Premium is a major focus for Nicolas [Berggruen], and the rumors about selling off the [premium] business are totally incorrect."
In the next two years, KaDeWe's women's and men's departments will be revamped. "We'll be bringing fashion to a new level, looking at brands like Donna Karan, Armani Black Label, Caroline Herrera, and will probably edit out some lower brands," he said. In men's, Jennings aims to add Ralph Lauren Purple Label and Ermenegildo Zegna.
New brands already added include The Kooples, Rena Lange, Rag & Bone, Helmut Lang, Theory and Alexander Wang in women's, and Bruno Cucinelli, Etro, Porsche Design, Ted Baker, Drykorn, Stone Island and Closed for men.
The store's famous food department will also be upgraded, as well as the rooftop restaurant, and Karstadt's premium door in Hamburg, Alsterhaus, will be getting a revamp in 2013.
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