Department store groups are obviously realizing that nationally and regionally there is no longer sufficient living-space in the Premium and Luxury segment of the market for consumer goods.

Who would have thought that the managers of Karstadt, Debenhams, Galeries Lafayette and Rinascente are sitting at a table, coram publico and discussing a possibly shared future. This shows a sense of responsibility and courage and deserves to be appreciated. We have said for a long time now, that there is no future for these businesses in independence and that it would be cheaper for brand companies if they forced vertical distribution freely and independently instead of subjecting themselves to the never-ending requests of the department stores for marketing subsidies.

In my opinion, what is going on right now is good, because there is no alternative to it. The end of the national department store has become reality, because there is no living-space for a retail specificity with the expenditures of a department store, positioned between discounter, mega stores and factory outlet of the globally operating mega brands. When it comes to shopping at a department store there is no real reason or convincing value for the consumer. ‘Shopping in the city’ may be an interesting term but no more. And this in times where the consumer has to try to get downtown on overcrowded roads and if he/she finds a parking spot it is at a horrendous fee and even the slightest parking-meter violation costs dearly. Karstadt tried this in the recent past: Being a department store for desire and luxury and yet at the same time desperately propagate city marketing via pricetag-marketing from month to month.

The golden age of department stores, which is so impressively described in the book on the history of Wertheim and which marketing experts would like to breathe new life into, is dead.

Department store managers cannot produce the type of Ebit profit figures for their investors that are achieved through the vertical distribution structures of the mega brands. And the owners of the mega brands can no longer do without the independent stores where they can stage a brand in its own living-space. And what they cannot do and do not want to do with their brands is giving support to the private labels of the department store chains.

If there is no living-space on a national or regional level, are the prospects on the European level any better? This question automatically comes to mind, if you want to follow my explanation. I think a European solution that would also require department store chains from other European countries to join, is feasible, if it consists of giving up the merchandising business medium term and instead practicing sales area management. I do not want to conjure up the apocalypse. I do think it is very natural that change sometimes brings about more than small variances. Today wholesale as it used to be handled between manufacturer and retailer does no longer exist. And the very traditional export/import has changed its business contents very drastically.

When the department store was born, there was a need for creating worlds of experience that lead people towards consumption. Today, people are able to experience so many wonderful things, they do no longer need the artificially created ‘commerce euphoria’. I think the merchandise managers are smart enough to recognize all of this get together and talk about the future and let the first step follow other steps that will offer up new prospects for the company.