MALL MALAISE

Billion Dollar Maybe

Mall of Berlin Action press
Wanted: more mall rats.
  • Why it matters

    Why it matters

    • The Mall of Berlin needs to expand beyond tourists who like to window-shop but not necessarily buy.
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  • Facts

    Facts

    • Mall of Berlin was built on the site of the legendary Wertheim department store, founded by a Jewish family in 1894 and confiscated by Nazis in the 1930s.
    • More than 10 million people have visited the mall since it opened six months ago.
    • The mall’s opening was delayed four months and fire alarms are still not yet working properly.
  • Audio

    Audio

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When builder Harald Huth opened his nearly €1 billion or $1.09 billion Mall of Berlin in September 2014, curious Berliners and tourists swarmed the shopping center on Leipziger Platz.

Nowadays, the atmosphere is different. The mall was fairly quiet last Friday afternoon, normally a busy time for retailers. On Saturday too, traditionally the most popular day for shopping, the only crowds were at the self-service food court.

Some retailers are disillusioned.

“The hype is over,” said a sales assistant in a fashion shop on the second floor. Berlin shoppers had discovered many of the same deals in other retail centers around the city, the worker said.

Workers protested for weeks in front of the center with the slogan “Mall of Shame.”

An employee in the three-story men’s fashion retailer, Wormland, said that apart from Saturdays, customer interest was low.

A mid-sized retailer that sells gifts and other items said his original store east of the city center had better business than the new mall store.

More than a dozen shops are empty just six months after opening. Among them is Feinkost Kropp, a family business from Berlin’s Neukölln district.  The company declined to say why because a legal dispute is likely, presumably about getting out of its lease.

Nordsee, the fast food fish eatery, also moved out its store at the beginning of March.  Company spokeswoman Jutta Rubach said the “center’s concept” was not what the company expected. She, too, declined to say more, apparently because of ongoing negotiations with mall management.

The underground level appears to have little traffic. The Depot furniture store started to clear shelves earlier last week, only to begin refilling them again.  Apparently, “an agreement with the landlord” was reached, according to one employee.


Video: Mall of Berlin opening day.

Some retail observers are beginning to ask whether the good times at the mall are already over.  But HGHI is trying to counter skeptic with positive spin.

“There has never been a more successful shopping center opening in Germany,” a spokesperson said, noting that the mall has “welcomed more than 10 million visitors” since September 2014.

The number of empty stores, the spokesperson added, was relatively small compared to the center’s 270 total. And the closing of some stores, including the toy shop Imaginarium and the Madonna fashion boutique, had nothing to do with the mall but the fact that they had filed for bankruptcy, which affected all their German locations.

But René Schwarze, who used to sell soft toys at his Maulwurfshop, blamed sparse crowds and a general lack of activity in the mall, except on Saturdays. His business, which included another shop in Dresden and an online outlet, went bankrupt in part because of the lack of mall customers, he said.

Mall management said they are working on “better visibility” of the mall from Potsdamer Platz and better signposting for the car park.

“There is always a phase when practical, everyday difficulties arise,” said Nils Busch-Petersen, managing director of the retail association for Berlin-Brandenburg.

Based on experience, about 10 percent of outlets encouter difficulty in the first few months or have to close, he said, referring to this period as a “normal warm-up” phase.

The mall is part of a development project that comprises an entire urban district together with apartments, offices and a hotel. It is a “big investment in the future,” Busch-Petersen said, claiming to hear mostly positive feedback from mall retailers was “mainly positive.”

He pointed to the fashion store Look54, which says its satisfied.  The store sells Berlin-themed clothing mostly to tourists at the mall. One factor in its success might be the shop’s location near the main entrance.

Christoph Meyer, who specializes in retail real estate with his company CM Best Retail, said the new mall needs more time.

Until recently, Leipziger Strasse “just hasn’t been a retail trade location,” said Mr. Meyer, who is also honorary chair of the urban development committee at Berlin’s Chamber of Commerce.

He agrees with others who note that 10 million visitors “are not 10 million customers.”

Early on, the Mall of Berlin drew attention because of its four-month delay in opening and concerns about inadequate fire protection and trouble with construction workers not being paid by subcontractors.

HGHI claims that changes to the fire protection systems are nearly complete.  But because fire alarms are still not working, fire safety officers remain on call in case of an emergency.

However, Romanian construction workers are suing their former employers for payment of the minimum wage for construction work. A suit against one company has just been filed with the employment court.

The lawyer representing the workers, Sebastian Kunz, said he would proceed against the second company in the next few days.  He said the Romanian workers had been promised an hourly wage of €5, plus an employment contract, but had received neither.

Workers protested for weeks in front of the center with the slogan “Mall of Shame.”

 

This story originally appeared in Tagesspiegel. To contact the author: redaktion@tagesspiegel.de

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