16 September 2020
The Weekly

Editor's Note: The following is an extract and English translation of a recent interview that Globus CEO Franco Savastano conducted with NZZ (Neue Zürcher Zeitung - a Swiss daily Newspaper)

In February, the Central Group and Signa jointly took over the Globus Group from Migros. Following an important reorganisation, the group consists of department stores (Geneva, Lausanne, Bern, Basel, Lucerne, Glatt, St. Gallen, Zurich, Zurich Bellevue and Locarno) and specialty stores (trading under Globus, Herren-Globus and Navyboot). Some specialty stores were sold during the summer, as they were not strategic for the future department-store focused Globus group. One hundred jobs were also cut at the headquarters to match the new company’s organisation. The CHF300mn investment plan promised by the new owners will now be pushed ahead, mostly allocated to the renovation of the Zurich, Geneva and Basel locations. The store renovation in Zurich will start in March 2021 with the ground floor and the two top floors; the restaurant area will be enlarged and the terrace will accessible for everyone. The store reopening is planned for September 2021. Geneva will be the second location to be remodelled. Most of the investment will flow into the building in Basel owned by Central/Signa, with plans to completely rebuild the inside. Globus’ goal is to become the leading company in every location.

CEO Franco Savastano indicated that the company is already well positioned in the premium segment with their Delicatessa food department, home & household and in the beauty sectors, but there is an improvement potential in other areas such as accessories, handbags and shoes. Being part of the largest luxury department store group in Europe helps enormously in the negotiations and get big brands on board. Globus will massively expand the catering business as it is nowadays an extremely important function for department stores. There are plans that the new restaurant in Zurich should open on Sundays and in the evening too. For this autumn, the company has already tightened its brand portfolio and enlarged the shoe department. Next year, Globus will also limit the sale phase to January and from mid-June to mid-July, with the goal to focus on regular customers and their loyalty.

Analysing the last months, Franco Savastano mentioned that from the reopening on 11thMayto the end of August, sales were roughly at the previous year's level. But it will hardly possible to make up what was lost during the lockdown. Despite Covid, profitability in the last three months has improved compared to the previous year and Globus sees a clear positive trend. In 2021/22 the group expects to make profits again. In the first Corona phase, online business grew by over 50% and that channel share should increase from 10% to 15% this year. It is important to notice that it is now profitable. Swiss people are increasingly taking their vacation at home, so the prospects are good for October and the Christmas period as well. Globus does not rely as much as other department stores on international customers, as only 5% of their business is done with tourists. Questioned on future trends, Savastano indicated that department stores will always remain popular meeting places. As a traffic generator, they liven up inner cities, which is becoming increasingly important in view of online trading and home offices. However, opening a few more Sundays per year will become essential. The example of Copenhagen shows how popular Sunday is: since allowed, Sunday has become the second most important sales day of the week for Illum department store.