Why people talk so often about stereotypes when it comes to German shopping centers is not entirely clear, and in a way unjustified. In no other retail market is there such a competitive situation and diverse range of choice as in Germany.

The reason why many concepts are regularly encountered again and again in shopping centers and top retail locations is simply because people want to have the best choice in the respective sector. As well as a high level of customer satisfaction (as it is primarily customers that make a provider successful), this also ensures high revenue productivity, and consequently high, sustainable rental income.

Over the last few decades, many concepts from the international arena that have enjoyed success in their domestic markets and now want to seize their opportunities in Europe’s biggest retail market - Germany - have become established.

In recent years, following the opening of the Eastern European markets, Germany has become a genuine platform for pan-European expansion. Some providers may not always have got the timing right (trying again several years later or requiring a long time to penetrate the market), or may have been unable to gain customers and failed - the examples of the US giants Wal-Mart and GAP illustrate this.

Why Germany again?

After years of stagnation and falling revenues, the German market has calmed down again and dusted itself off (the high number of insolvencies in recent years, including those of major retail chains such as Hettlage, Boecker, Porst, Spinnrad and others, illustrates this).

Transparency regarding location diversity has improved. There was a need to analyse and define what regions, cities or locations (including pedestrianised shopping areas, specialty stores, and shopping centers) would make prime locations. Today, a sound expansion strategy can be implemented more easily in operational and logistical terms.

In many countries, national market leaders have emerged that are now also discovering Germany in the context of their expansion. For example, North Rhine-Westphalia has always been a testing ground for new concepts from Benelux, not just because of its high population density.

Highly specialised, vertical private labels such as Didi, Cool Cat and Riverwoods are coming through on the market here. The Sting is to be relaunched, this time with a new, distinctive profile and a new message. After many years of patience and persistence, Hunkemöller (underwear) and WE Fashion (young fashion) have now emerged as major players, and although many people believe that Orsay or Pimkie are German concepts, the roots for their German success were laid down more than 30 years ago in France.

Unfortunately, not everyone is always successful. Lindex closed its twentythree shops and withdrew from the German market following a second launch, which was a great pity. The biggest US clothing chain GAP failed to make the breakthrough with its ranges (albeit not adapted to German customers), selling its shops to its competitor H&M, which is now a fixture on the German market (although some may remember its teething problems about twenty years ago).

The sports sector is dominated by the associations with their numerous qualified members, who are in a position to respond to customers’ needs on a highly individual basis. This is the reason why the chains, extremely successful in their domestic markets - examples include Sports Experts (Austria) and Decathlon (France) - have been unable to assert themselves. Systems more highly oriented to demand such as Runner’s Point, or brands such as Jack Wolfskin, Puma and Nike will enjoy success here.

A trip through Europe shows that concepts have come and are still coming to Germany from nearly all countries. The best overview is gained at the real estate trade fair MAPIC, which is held every November in Cannes. Well over 1,000 retailers meet there, and there are discussions on extending joint expansion. The trade fair has become an essential event for all expanding companies.

Spain

The heavyweights in the Spanish retail market, Inditex (Zara, Massimo Dutti and many more), Mango and Springfield, have also emerged as well-known major players in Germany within just a few years.

Scandinavia

H&M led the way, others followed. The development of the Bestseller Group with the concepts Vero Moda, Jack&Jones, Only and Exit suggests an equivalent success story. The Bianco shoe concept also seems to have potential, and the design-oriented Scandinavians will also make their presence known in the accessories and jewellery sector.

Italy

We will also continue to hear from the land of fashion in future. Even if the established brands such as Benetton, Stefanel and Sasch still have work to do, Geox (the shoe that breathes), Sixty, Diesel and Gas (jeans) are currently enjoying a lot of success.

USA

The land of unlimited opportunities is always a source of new ideas. Whether these ideas are of a technical, emotional or textile nature, they can be exciting, but also successful. With almost 5,000 shops worldwide, and approximately 100 in Germany, Gamestop (formerly EB Games, a provider of software and games for computers and gaming consoles) has become established within just five years, in a market that was previously dominated by e-commerce and large retailers.

Apple is enjoying a real renaissance, particularly thanks to the iPod. Perhaps we might also get to see such spectacular locations in Germany as the Apple Cube on New York’s 5th Avenue. However, until then we can content ourselves with Gravis (Germany’s biggest Apple dealer - and a very successful one at that). The results of the first shops in shopping centers are highly promising.

Build-a-bear is regarded as one of the hottest concepts in the USA. Before the consumers’ eyes - in a highly personal and emotional manner - teddy bears are ‘born’, before being looked after like children by the customers (usually between seven and fifteen years old). It really is something to behold, particularly when the children come back to the shop to buy new outfits for their teddies. Market entry in Germany was carried out via the master franchisee of the Scandinavian market - a formidable combination.

Jeans (the American item of clothing) have become highly international. In addition to the very strong providers from Holland (G-Star) and Italy (Diesel), Levi’s of the USA (albeit now very well adapted to European conditions) has regained its strength. It will be exciting when the first shops of Californian top label 7 For All Mankind appear.

Fossil is known to us as a provider of accessories, especially watches. On approximately 100-150 m², they have developed a lifestyle theme around the brand with leather goods, jewellery, jeans etc., getting off to a great start.

The first Abercrombie & Fitch store in London was opened in spring 2007. This is definitely the cult brand in the USA, and is also very well known in Germany. It is only a matter of time before the first shop opens in Germany (and it is sure to be a huge success).

Central and Eastern Europe

We can also expect a few things from Central and Eastern Europe in future. As a result of the unbelievable size of the markets, strong players have emerged there and will reach us sooner or later. Concepts from Poland and the Czech Republic are taking their first tentative steps. The concepts from Turkey are particularly exciting. Outstanding system concepts have been developed on the basis of what is now extremely high-quality textile production. Koton for young fashion and Sarar for quality men’s clothes have decided on their start date for Germany. Sela will be coming soon from Russia.

It is a shame that there is nowhere near enough room in this report to list and describe all the countries and concepts - but there are of course many more.

Ultimately, the German retail and real estate market is a major challenge for all new concepts, which is also the case for those from Germany, of course. Although all that glitters is not gold, it is also true that who dares, wins. Those who have established themselves here in Germany can do the same in all other retail markets of the world. The German retail export hits (Media-Saturn, Douglas, Bijou Brigitte, New Yorker, P&C and many more) illustrate this.

There is finally a recognition that Europe is converging. Borders have not only been dismantled at a political level, but also conceptually in people’s minds. It is a great pleasure to work with these new providers and always to be able to offer customers something new and surprising, something which will continue to make our shopping centers successful in future.

Klaus Striebich - ECE Projektmanagement - Managing Director Leasing