It’s that time of year again: Berlin takes the Catwalk! Today marks the opening of the Berlin Fashion Week and welcomes designers and labels from all over the world. The international fashion industry is gathering in the German capital between 19 and 23 January to present next season’s trends. Fashion lovers and fashionistas usually put the new inspiration right into practice: Shopping! But what is really going on with Fashion & Co. in retail in Berlin? Are shop floors even still needed in the days of e-commerce?
“In the coveted prime locations of Berlin, demand exceeds short term supply by far”, reports Marcus Kötschau, Team Leader of Retail Services at Engel & Völkers Commercial Berlin. There the highest rents occasionally reach €310 per square metre. And: previously weaker secondary class locations such as the western part of the Kurfürstendamm between Olivaer Platz and Adenauerplatz are being strengthened by attractive international fashion labels such as the new Italian brand Dimensione Danza, the high quality haberdasher Pal Zileri or the Spanish children’s fashion label Nanos.
Retailers and manufacturers are rethinking
“Losses in sales to online providers like Amazon or Zalando have forced static retailers to rethink”, explains Kötschau. Regarding the vast diversity online as well as the importance of proper brand positioning. Therefore, both large commercial chains as well as many well-known manufacturing brands are increasingly expanding their online activities and consequently relying on multi-channel strategies. Thus continuing to blur the line between turnover generated online and in-store. “It doesn’t matter if it’s Adidas, Apple, Esprit, Levi’s, G-Star, Lego, Mango, Hugo Boss or Villeroy & Boch – if you don’t have static retail presence, you can’t do business online”, exclaims the retail expert.
In his opinion, this is especially true for international fashion concepts which are newly breaching the German market. “You are forced to rely on stores in the German retail hot-spots to make the brand known and to convey the lifestyle concept to the desired target audience.” And where to do that better than in the capital where you can reach not only 3.5 million inhabitants but also 11.3 million overnight guests and 130 million day trippers every year.
International fashion brands are looking to Berlin
Countless international brands are opening their first German wide flagship stores in Berlin, admittedly preferring to be in the West of the city on Tauentzien Street or on the Kurfürstendamm. The Spanish Inditex group is represented here not only by ZARA but also by its lesser known brands Bershka and Pull & Bear. The American young fashion brand Forever 21 has opened in the capital just like Uniqlo. The Japanese fashion chain has been trading in the old Nike Town on Tauentzien street since April of this year in its only store thus far with a sales floor of 2,700m², doubling as its largest store in Europe. Even the fashion brand Reserved, originating from Poland, has begun renting on Tauentzien street and is to open a large 2,000m² flagship store by autumn 2016 at the latest. “For these retailers, the most important thing is the high footfall which is necessary in order to be able to generate the correspondingly high turnover per square meter required by the high rent”, explains Kötschau.
On top of this however, the main drivers of the unbridled high demand are also smaller designer labels from the higher-end fashion market such as the Swedish brand Filippa K for example, for whom Engel & Völkers Commercial Berlin, by autumn 2013, had already brokered a store on Kurfürstendamm. The French fashion labels The Kooples and Zadig & Voltaire are also looking to establish themselves on Kurfürstendamm.
Cost intensive brand and image positioning
Furthermore, it is the well-known and famous manufacturers of branded products from the middle to high-end consumer market such as Lacoste, Longchamp, Picard, Michael Kors or Swatch who present their brand stores in the best inner city locations. “Shops furnished with a corporate identity primarily serve prestigious purposes. They are an important marketing tool to position the brand in the market and to keep it in the minds of customers”, explains Kötschau. Whether or not money is earned in the shop itself is usually a secondary concern. The goal is supposedly much more to increase the value of the brand and the company’s total turnover which is realised both online through their own shopping portals as well as those of others and through classic specialist shops.