News from the German retail market week 31

News from the German retail market week 31.

  • German retail market – Turn over week 31 +1% vs LY. 
  • Openings & Business
    – Mango
    opening in Frankfurt, this is their biggest store in Europe.
    – Birkenstock  the German shoe manufacturer is stepping into the international licensing business through a partnership with brand consultancy trademark one AG.
  • Retail economics
    – The Metro group
    who owns METRO Cash & Carry, Media Markt & Saturn, Real hypermarkets and Galleria Kaufhof showed a really weak third quarter.
    – Adidas will bring down their forecast for the present fiscal year. They now believe they will earn around€200 million less then the first forecast.

Turn over week 31 = + 1% vs. LY.

My thoughts on that: Finally, after seven weeks in a row with a minus vs. LY , last week showed a plus for many of the retailers in Germany. 

Source:(http://bit.ly/1xXGpi9)

Retail Economics

Metro Group the company showed a positive result after the first 9 month but the third quarter brought their result down from €119 million to around €52 million.

Adidas will bring down their forecast for the present fiscal year. They now believe they will earn €200 million less then the first forecast.

Source:(http://bit.ly/1tN2DFW ) (http://bit.ly/1zN8rj9)

My thoughts on that: The article doesn’t tell in detail the reason for Metro group or which business unit had the worst performance. I guess that kaufhof is not at the top of their game. As I have been writing before I believe that a lot of the larger department store chains have problems to keep up with the international expansion and the online and Omni-channel solutions that are growing in the market. Not sure how large their e-commerce business is compare to their physical sales. Although, running those huge department stores can’t be cheap.

Adidas, I am a bit surprised that Adidas are lowering their expectations and forecast. I believe that the World Cup wasn’t as successful as expected or that their “normal” business with clothing and shoes hasn’t performed as expected. Although not sure which market is performing.

Openings & Business

The Spanish retailer MANGO opened up the biggest store in Europe. The location is direct on Zeil in Frankfurt city. The former occupant was the Brand Pohland, the location is around 3000 sq. sales area and in 5 different floors. The brand will show all their collection from DOB, HAKA, KOB, Accessories, Sport, underwear and large sizes for women.

Birkenstock’s strategy is to conquer new strategic business segments, market and target groups. The brand is synonymous with health and convenient and comfort shoes and this is the area where they are going to expand and focus their product offers. Their product lines expansion lies in: living and sleeping, work environment, feet plus running and lifestyle.

Source:( http://bit.ly/1AOujfv) (http://bit.ly/1orIwcy)

My thoughts on that: A great A- location in Frankfurt. I think this will fit their target customer pretty well. The rent is of course in the top league, but I think the footfall and the buying potential are really good. I have to say that the concept Mango looks better and better, their stores looks more structured and attractive and it will be interesting to follow their performance.

Birkenstock, the brand was chosen the “Brand of year” in the US 2013 and is already commercialized in more then 80 countries around the Globe. With that kind of brand awareness and their “ new” product mix I believe they have some really good condition to grow even more on an international level.