Globus: A Department Store Changes Its Face

A visitor returning to the flagship department store of the Swiss chain GLOBUS in central Zurich after a long absence is headed for a surprise. The visiting shopper is about to encounter on entry a completely different landscape — bright and flashy, with a large avenue stretching from the front entrance (on Bahnhofstrasse) to the back entrance (on Lowenstrasse). Along both sides of the avenue one will meet shop-like units with open fronts facing the avenue. The units are dedicated to different well-known brands, except for one space serving as a coffee-bar. It is quite a different layout than existed about three years ago in the same place, and the looks of it is also very different. The store concept has been reformed, gone through a modification — under a new ownership.

Truly, this is the second time the interior design of the flagship store has been transformed in just the past 10-15 years. The previous change in visual appearance was also significant, scrapping the layout and style prevalent during much of the second half of the 20th century to a more up-beat style appropriate for the new millennium. In the former design the dominating colours were black, grey and white — on walls, columns, fixtures, floors and ceilings. Spotlights shed pools of intense lighting on areas of merchandise displays. It gave the scene of the ground floor, and on other floors (e.g., women and men fashion, home, food) a dramatic, chic, and especially upscale feeling — more than it used to be earlier, and it took a little time to get accustomed to. The scenery now is much brighter, with soft lighting more evenly spread. The arrangement on the ground floor is much different as well, concentrated as ‘shops’ on the sidelines of main pathways. Beforehand, displays were scattered in a greater variety of forms — on the one hand, they left a narrower main pathway free, on the other hand, displays of merchandise were more accessible and inviting, in a hand’s reach, creating a more intriguing journey.

Additionally noticeable, the large coffee-bar area that used to be to the left of the entrance from Bahnhofstrasse, and was an important vibrant place of gathering and taking a break for refreshment, is missing; it has been replaced by a smaller place (~50%) which is located not right next to the entrance but a little further inside the store.

The layouts or spatial arrangement of displays on other floors of the flagship store (e.g., women’s and men’s wear) seem more similar to the past. However, the division of the department into sections designated each to various high-end, luxury brands is much more salient. Everything seems to be organised in a format of shop-in-shop, designated to brand concessions. It means that units of brand ‘shops’ are managed more autonomously, and the shopper is driven to choose and purchase from each brand separately. Furthermore, the Globus private label or own-brand of the retailer has been cancelled. This merchandise arrangement makes it less convenient for shoppers, actually quite discouraging, to try, choose and mix clothing items (e.g., trousers, shirts, jackets) for outfits from different collections.

Nonetheless, it should be noted that this retailing model of department stores has become more common in the past twenty years in European cities. Moreover, Globus has been characterised as upscale or high-end for a long time, selling high quality products, in line with other chains of department stores; yet, as more of these retail chains adopted a concept of House of Brands — oriented towards high-end, prestigious, premium-priced brands — they have become even more luxurious, extravagant, and less affordable (i.e., meant for the really affluent shoppers). Firstly, Globus follows in the footsteps of its competitor Jelmoli, whose neighbouring flagship store is nearby adjacent to Bahnhofstrasse, that adopted this model about ten years ago. Yet, the same approach can be found in other upscale department stores these days, from London (e.g., Selfridges), through Paris (e.g., Gallery Lafayette) and Milano (La Rinascente), to Berlin (e.g., KaDeWe).

The Globus retail chain is in new ownership since February 2020 — it was acquired by a joint venture of Central Group, an international retailer of Thai origin, and Signa, an Austrian real estate & investment firm (for CHF 1bn). Central Group specialises in retail, particularly luxury department stores, and in consumer brands, and is in charge of the management of the retailing business. The previous owner of Globus was the Swiss retailer Migros, known primarily for food retailing (supermarkets), which held Globus from 1997 to early 2020. The history of the chain of Globus department stores is however much longer than that — the Swiss retailer Globus just celebrated 130 years in 2022.

• As of 2020 Globus operated 13 large department stores, plus smaller stores added to them (e.g., in fashion, food and home domains). The department stores are spread over Switzerland, from Geneva and Lausanne, through Bern and Basel, to Luzern (Lucerne), Zurich and St. Gallen (recently the chain closed its department store in Locarno).

Central Group (CG) is a proud owner (with Signa) controlling other famed department stores (chains) in Europe, such as La Rinascente (Italy, since 2011, CG’s first takeover in Europe), Illum (Denmark, since 2013), and KaDeWe (Germany, since 2015); Selfridges was underway to join them in 2022 (UK, a deal made in the end of 2021, for £4bn). Hence, Globus finds itself in good company. This is a strong linkage that makes sense of the changes Globus has gone through. Globus was acquired with the intention in the first place to allow its stores to benefit from ownership by CG of other high-end department stores and its expertise in consumer brands, that is, making Globus an integral part of this network; as stated earlier by Vittorio Radice, CEO of CG Europe, Globus “will benefit from the transfer of know-how within our group” (SwissInfo, 4 February 2020). There are good signs in support of this at Globus in aspects such as interior design, retail concept, and selection of brands.

The handover of Globus to CG turned out to coincide with the outbreak of the coronavirus pandemic in Switzerland and in Europe as a whole. It also took place shortly after Franco Savastano had entered the position of CEO of Globus in late 2019. Savastano explained in an interview to CEO Magazine the challenges facing him from start and the reforms he was trusted to lead: “Our brand was headlined by our food, home and beauty departments, but I felt Globus had fallen short in fashion and accessories. This was my role when I arrived, coming from the background that I had, to determine how we could amplify our sense of luxury and attract more A-list brands.” In his latest position Savastano was formerly CEO of Jelmoli for seven years. (“In the Lap of Luxury: Franco Savastano“, CEO Magazine, 27 July 2022.) He apparently acted in similar ways at Globus as he had done earlier at Jelmoli (particularly in their flagship stores), and thus enhanced indeed the luxurious image of Globus, perhaps even surpassing Jelmoli. But by narrowing the gap between Globus and Jelmoli, Savastano may have blurred the differentiation between them with respect to the solutions they offer and the consumer segments they target. Moreover, Globus seemed to be positioned well, mid-way between the luxurious style of Jelmoli and the more practical and affordable format of Coop’s department stores. This is no longer true.

Savastano described in his interview the paradigm shift he recognised and ensuing changes he oversaw, while facing the hurdles of the pandemic. The programme he constructed has four pillars: people and their talents; investments (including the refurbishment undergoing in stores as a focal point); open space design (in stores); and taming the digital frontier (especially the challenges introduced by online shopping). The focus and motivation of the programme, according to Savastano, was constructing a delicate mix of the right brands with the right service.

Migros contributed greatly during its period of operating Globus to develop superior, delicacy food departments and dining services (‘food halls’). Its Bellevue store in Zurich is dedicated to food, including a dining bar, and goods for home (update: the store kept the former design concept until going through major remodelling works of the building, as of late 2023). In addition to its large food delicacy department, the flagship department store had previously, as mentioned above, a large coffee-bar next to its main entrance that was busy at almost all times during the day. The attraction of a place for people to meet and socialise has surely diminished, and it became less appropriate during the crisis period of the pandemic, but could it not be restored? The point is, seemingly, that the coffee-bar could hurt the luxurious image of the store Savastano was seeking, just like the street food counters that used to be at the front of the store and have been removed. Thereby, the store may have actually become less inviting, contrary to the CEO’s intention.

The major ‘paradigm shift’ in high-end department stores like Globus seems to be that they have turned into shopping centres or malls more than acting as department stores as they were known and experienced by shoppers until twenty years ago. While departments at Globus are designed and arranged in open space, the division into brand areas or ‘shops’ may be strongly present. In the flagship store of Globus in particular, the avenue on the ground floor resembles a mall much more than a department store. This format is not prevalent in all types of departments or department stores where they maintain different balances between categories and their brands. Brands, prestigious and famous as they may be, are surely welcome in department stores, and some may be awarded distinct sections as anchors, but they should not have been let to overpower the department store concept.

A department store should not be like an exhibition place, fascinating by design and interesting to look around for brands. Consumers should feel comfortable to shop around and buy products, even when they are of higher quality and more expensive. Overwhelming shoppers with high-end brands can actually render the shopping journey and choice process less friendly and less pleasant. Globus and Jelmoli compete on elegance and prestige, but consumers now are better informed, and they know better and are harder to be impressed. Affluent shoppers who look for the top-notch brands tend to prefer smaller stores or shops that provide more privacy rather than the large departments. Therefore, deeper search for answers is needed: What kind of shoppers is a luxurious department store like Globus really looking for? And, What would genuinely attract them?