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On its shopping website, Berlin luxury department store KaDeWe promises: “Back for you soon.” In fact, the company is shutting down its e-commerce as part of the restructuring. Almost 30 employees have to go
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Anyone who visits the online shop of Berlin’s luxury department store KaDeWe these days will get the impression at first glance that everything is going as usual. “Sale of up to 40 percent” is written there in bold letters. However, a subtle note in small letters at the top of the KaDeWe website can be overlooked: “Unfortunately, no orders are currently possible. We will be back for you soon.” During the ordering process, just before payment, a note pops up that no purchases are currently possible in the online shop: “Back for you soon,” it says.
But in fact, this is a promise that the company will no longer be able to keep in the long term: According to information from Capital, the management of the insolvent luxury department store group has decided to close the online shop as part of the ongoing restructuring. The decision had to be made to “completely shut down the e-commerce division” and “concentrate on our core business in our department stores,” according to an internal communication to employees from the end of May, which Capital has seen. As a reason for closing the online shop, the management stated that the analysis of internal structures and processes had shown “that the e-commerce division cannot be continued profitably.” The aim is that the decision “can be implemented” by the end of May. The company left questions about this – such as when the shutdown will take place – unanswered.
The KaDeWe Group, which includes the iconic Berlin department store, the Alsterhaus in Hamburg and the Oberpollinger in Munich, has been in financial trouble for some time, as the balance sheets, which were only published after the bankruptcy after a delay of several years, reveal. At the end of last week it was announced that Benko’s previous joint venture partner in the luxury retail trade, However, nothing has been announced so far about the specific restructuring steps for the company, which has been managed by restructuring expert Josef Schultheis since March.
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According to internal documents, 26 employees who have already been laid off for operational reasons are affected by the closure of the online shop. The majority of them were previously employed at the group’s Berlin head office, and some also at the KaDeWe division. Most of the employees affected are to leave at the end of August. According to an agreement between management and the general works council, employees who do not contest their dismissal will receive a “waiving bonus” of 1,500 euros gross. The corresponding works agreement from the end of May, which was also approved by trustee Christian Graf Brockdorff, is available to Capital.
The fact that a retail company is withdrawing from online shopping and focusing exclusively on brick-and-mortar business is unusual to say the least. Internal documents show that online retail only accounted for a tiny proportion of the department store group’s sales until recently. E-commerce revenues were usually in the five-figure range at most per day. Now, under the leadership of the new owner Central Group, the company is banking on the fact that the luxury segment functions differently than mass business and that customers still prefer the personal shopping experience here.
Source: Stern
