Thursday, 18 May 2017

Karstadt further develops department store to marketplace business model

Start of a cooperation with El Corte Inglés

Parallel start of an off-price model in Karstadt stores

Karstadt CEO Dr Stephan Fanderl presented the further development of the department store into a marketplace to 500 guests from Europe and the Far East at Karstadt’s supplier conference in Essen. “The department store is the only physical marketplace in the city,” explained Fanderl. “This offers the opportunity both for brick-and-mortar and for online-only concepts to come onto the shop floor with us.” Fanderl has agreed an extensive first partnership with the El Corte Inglés subsidiary Sfera. In parallel, an off-price concept will be launched in Karstadt stores.

“The customer is still looking for an extensive product range in the department store. As a market place with strong trade expertise and good knowledge of local requirements, we can fulfil this wish precisely,” says Fanderl. Linking online and offline offerings to create a multi-channel offering is important to him: “We want to become channel-independent when selling merchandise and to even better link the advantages of our 79 department stores all over Germany with the virtual world.” For Karstadt, this is not about merely subletting. “We are and remain a trader,” said Fanderl. “Partnerships mean categorically more sales opportunities for Karstadt, our partners and brands.”

In the autumn/winter 2017 season, Karstadt is exclusively launching a cooperation in Germany with Sfera, a subsidiary of the leading Spanish department store operator El Corte Inglés. Beginning in August 2017, Sfera’s children’s and baby clothes ranges (one month to 14 years) will be introduced in 50 stores at first. The remaining Karstadt stores will start in early 2018, and in the second half of 2018. Karstadt Chief Merchandise Officer Jörg Peter Schmiddem explained: “The El Corte Inglés subsidiary Sfera’s children’s and baby clothes have won out on the hard-fought Spanish market against familiar labels such as Zara and H&M. We have worked hard on them – above all adjusting them to German customers’ tastes. Sfera is an excellent fit with our Karstadt clientele.”

Dr Fanderl also presented a new off-price concept, which will be piloted at Karstadt during 2017. Together with online partners, Karstadt will thereby offer renowned clothes brands at heavily reduced prices in special areas in stores. This, said Fanderl, will bring additional customer groups to Karstadt. “In our new off-price concept, the customer will be able to order, buy and also return online and offline. Everything will be possible in every channel.”

Fanderl encouraged the around 500 supplier partners to be open to new forms of collaboration. “We need a different kind of cooperation and information exchange,” he explained. “By sharing our knowledge of purchase behaviour and merchandise with our strong partners, all of us will win.”