What: Globus CEO outlines recovery plan focusing on luxury brands and new store openings, aiming for profitability by late 2026 amid retail sector challenges.

Why it is important: The recovery plan reflects the ongoing restructuring in the European retail sector following Signa Group's collapse, illustrating how department stores are seeking to redefine their role in the market.

Franco Savastano, CEO of the Globus department store chain, has announced a strategic plan aimed at returning the company to profitability by the end of 2026. This plan hinges on the opening of new stores, including one at Bellevue in Zurich in November and another in Basel set to open on November 1, 2025. Savastano emphasized that these new locations will significantly increase sales volume without substantially raising fixed costs.

The strategy involves a shift from being product-driven to brand-driven, with a particular focus on luxury brands. Savastano noted that since introducing luxury brands like Louis Vuitton on the first floor of their Zurich store, space productivity has doubled.

This move comes in the wake of challenges faced by the retail sector, including the bankruptcy of former co-owner Signa and the insolvency of sister company KaDeWe in January. Savastano personally intervened with suppliers to secure inventory, demonstrating the company's commitment to its new direction.

Additionally, Globus has largely abolished remote work, with a new policy allowing one day of home office per week, excluding Mondays and Fridays. This change affects about 200 office employees, while the remaining 2,500 work in stores.

IADS Notes: The luxury retail sector is experiencing significant upheaval, as evidenced by the financial troubles of the Signa Group. According to WWD (January 2024), Signa's key retail property division has filed for bankruptcy, affecting various high-profile stores across Europe, including Globus in Switzerland, KaDeWe in Germany, and Selfridges in  the UK. Fashion Network (February 2024) reported that the collapse of Signa has led to the bankruptcy of ambitious projects like the Lamarr luxury department store in Vienna, highlighting the extent of the financial distress. This has resulted in insolvency proceedings and restructuring efforts for many of these retailers. In response, some stores like Globus are shifting towards a more luxury-focused strategy to differentiate themselves in a competitive market, as noted in a November 2023 report. Fashion Network (January 2024) also highlighted that the situation has raised questions about the potential impact on other retailers like Galeria Karstadt Kaufhof. These developments underscore the broader challenges faced by traditional department stores in adapting to changing market conditions and consumer preferences, while also presenting opportunities for restructuring and redefining their role in the luxury retail landscape.

Globus CEO expects to be in the black by the end of 2026