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Switzerland is one of the world’s smaller countries, with just 8 million people. And Zurich, its biggest city, is hardly a global giant, with fewer than 400,000 inhabitants. But both punch well above their weight. Switzerland and Zurich are highly cosmopolitan and among the world’s wealthiest locations in terms of income per person, with stratospheric Swiss prices counterbalanced by commensurately high local salaries.
This story first appeared in the May 20, 2013 issue of WWD. Subscribe Today.
As an international financial center, Switzerland’s big banks and markets attract wealth, as do services such as accountancy, law and consulting, along with media and information technology.
Zurich benefits from strong tourist and transit flows. Its airport is among Europe’s busiest, with the high reputation of national carrier Swiss attracting significant transit trade. On top come strong tourist flows — notably, in recent years, newcomers from Asia, particularly China.
A Swiss retail showcase serves many purposes. Customers are overwhelmingly affluent, upper middle class, ranging from well-heeled, globe-trotting locals to rich foreigners, resident expats working for multinationals or visitors coming to see their private banker or install offspring in upmarket Swiss private schools, or for top-notch medical treatment. That cosmopolitan pool means Zurich’s shoppers range from rich Russians to plutocratic Peruvians also attracted by Switzerland’s safety and discretion.
“The region is an important luxury market for Europe. Zurich is the largest city in Switzerland. It is very international and diverse. It is simultaneously young and modern and traditional and historical. Its status as a leading financial center means that there is a high quality of living, traveling and spending in the area,” said Bruno Guillon, chief executive officer of Mulberry, one of this year’s openings. “There are two types of customers in Zurich, and Mulberry appeals to both: the well-situated local from Zurich and its surrounding area, and the international clients travelling for business and tourism.”
Top fashion retail is concentrated around the showcase Bahnhofstrasse, a leafy, largely pedestrianized artery leading from Lake Zurich to the main station (Bahnhof), and smaller streets like Rennweg and Storchengasse alongside.
“The Bahnhofstrasse and its surroundings are the Swiss equivalent of a big mall, just without a roof,” said Marco Feusi of Wüest & Partner, a leading commercial property consultancy. “The area offers the full range from H&M to Dior and the most exclusive jewellers, all in one compact zone. That makes it very special.”
Restrained elegance is key. Punks, beggars and buskers — a feature of even the most prestigious shopping streets in most other countries — are conspicuous by their absence. Crime rates are minimal.
Zurich is Switzerland’s undisputed retail — and fashion — capital. “The Bahnhofstrasse is the best-known shopping street in the country,” said Markus Hünig, chairman of the Zurich Bahnhofstrasse Association, a local lobby.
Economic growth and lack of supply have pushed rents up. “Ground-floor Bahnhofstrasse space goes from 3,500 to 9,000 Swiss francs a square meter [about $340 to $872 a square foot at current exchange] a year,” said Feusi.
Mulberry, interestingly, opted for Storchengasse, a smaller and much more intimate street nearby. “We spend a great deal of time considering an area. A good location is not just the right street but the right store, size and building. Storchengasse is a beautiful street with a variety of boutiques in the heart of the city. It has a feel of traditional Zurich but is very inviting for shopping and attracts a range of customers,” said Guillon.
Population: 394,012 (end 2012)
Population change, past year: +1 percent
Population change, past five years: +6 percent
Population projection: 425,000 in 2017
Per-capita income: 84,648 Swiss francs (private sector; figure published 2010; about $83,000 at average exchange for 2010)
Key industries: Financial services, banks, insurance; manufacturing (light and heavy engineering, medical technology); services including accountancy, consulting, law; information technology and software; tourism
Where the growth is coming from: Switzerland enjoys a modestly rising birth rate, but transient residents have been the real driver. Arrivals have tended to be professionals and entrepreneurs, often from neighboring Germany. Zurich and its surroundings have been the main magnet.
Number of malls: Two within five miles (Sihl City and Glattbrugg)
Mall developments: None within five miles. Switzerland has relatively few malls. Development is hampered by lack of land, severe zoning restrictions and stiff rules on building preservation.
Other major construction projects: The Zurich West former industrial area is now under redevelopment into high-rise offices, apartments, shops and hotels; Europaallee area of former railway yards around main railway station is a substantial, though smaller, additional spur to retail, residential and office development; The Circle, a vast, semicircular office, retail and hotel project adjacent to the terminals at Zurich airport, further outside the city.
HOT SPOT: BAHNHOFSTRASSE
Less statuesque than the Champs-Elysées, more imposing than Bond Street, this is Zurich’s Fifth Avenue — every upscale label wants in. Incumbents include Chanel, Dior and Prada, along with Hermès, Louis Vuitton, Cartier and many other top watch and jewelry companies.
“Zurich is a relatively small but modern city. Everything can be done on foot, and on the Bahnhofstrasse, a large number of well-known and respected brands are concentrated in a compact area” observed Markus Hünig, chairman of the Zurich Bahnhofstrasse Association.
But fashion competes with equally well-heeled watchmakers and jewelry stores in the race for space. Locals claim Bahnhofstrasse rents are the highest in Europe (albeit skewed by currencies). Feusi cautioned that some superexclusive London retail is actually dearer. But he said the Bahnhofstrasse genuinely boasts Europe’s highest retail revenues by floor space.
Due for a facelift with new seating and paving, the street retains some landmarks amid its constant new faces. Lindt & Sprüngli’s café and confiserie on the corner with Paradeplatz — home to top Swiss banks UBS and Credit Suisse — is particularly popular. But critics argue the Bahnhofstrasse has lost some of its local charm as smaller and funkier stores have been squeezed out by the top international brands, like Bally and Brunello Cucinelli.