The bankruptcy of KaDeWe and the end of the department stores

Dhe Berlin Kaufhaus des Westens, which everyone calls KaDeWe, has filed for bankruptcy. It has been affected by the insolvency of its Austrian owner Signa (49.9 percent), which has also brought the previously merged department stores Karstadt and Galeria Kaufhof to the brink of ruin. Kaufhof recently went bankrupt for the third time in just a few years.

This seems to be the end of an era; at least in Germany. An era of trade, consumption and inner cities. For almost 150 years it was dominated by large department stores. Marguerite and Aristide Boucicaut began the history of department stores with their takeover of “Au Bon marché” on Rue de Sèvres on the left bank of the Seine in Paris in 1852. Kaufhof was founded in 1879 in Stralsund, where Wertheim had also had its headquarters since 1875. Karstadt opened its first store in Wismar in 1881, the first department store of the Hertie company, which was incorporated into Karstadt, opened in Gera in 1882. KaDeWe was the youngest of the companies founded in 1905.

1898 the first escalator

They took place in the atmosphere of emerging mass consumption. The department store was organized in the spirit of command over large quantities, except that the staff consisted largely of “department store girls”. Émile Zola described her life fabulously in his “Paradise of Ladies” in 1883. Here, instead of supply, demand was scarce. Customers were not bothered with sales pitches, but were able to roam freely through the product landscape. In 1898, Harrods introduced the first escalator in London. Not the individual object, but the inventory determined the calculation, which worked with low margins. Prices were therefore no longer negotiated; almost no one, apart from Oscar Wilde and Lillie Langtry, could apply; everything was aimed at seducing customers.

The imagination has migrated from the department store. After all, it is said that the KaDeWe is the third most visited monument in Berlin after the Reichstag and the Brandenburg Gate. Forty percent of sales come from them. But does anyone still dream in the midst of the offers, even wonder? At Christmas the decorations leave a lasting impression. Variety of goods has become normal for many. What was once considered a luxury is now available to large classes. Those who have a lot of money often prefer retail and actual luxury. If you have less money, you can shop at a department store called Internet or at Urban Outfitters. The original concept that you could also sell blouses, perfume and watches to people who want a cooking pot has lost its power. Google has taught humanity to only find what they are looking for.

It is therefore no coincidence that in recent decades KaDeWe's food department has been its claim to fame. However, it was hardly ever mentioned without ridicule of the West Berlin middle class, who pour glasses of champagne onto their lamps in front of plates of fine fish on Saturdays. And even this department has come into competition in the form of the “fresh paradises” and the online gourmet trade. In Düsseldorf, the property “The Crown”, which used to be a department store, is now a luxury supermarket – this term alone sums up the paradoxical development of consumption.

Bankruptcy does not automatically mean closure. KaDeWe is majority owned by a Thai conglomerate, which is now the focus of attention. Maybe things will continue, the management recently announced that the house was “safely positioned”. In any case, the actual closures of the large department stores – most recently around 40 percent of the Kaufhof branches – are a disaster for the city. Department stores of this size are not easy to convert into real estate. Even in times of crisis, they were magnets from which surrounding businesses and urban liveliness benefited. If they disappear, the depressing impression of the inner cities will increase. The “ladies’ paradise” is replaced by vacancies in the pedestrian zone.