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The IADS travelled to Berlin last November to meet with Andre Maeder, the CEO of the KaDeWe Group, a few hours before the unveiling and celebration of the store’s ultra-luxurious revamp after years of work. Berlin is not precisely coming to the top of mind when it comes to luxury retail when compared to London, Paris or Milan… yet. But while the city undoubtedly is a buoyant and energetic place, the upgrade of KaDeWe, combined with a shiny new airport, might very well be a game-changer and put Berlin on the international luxury map.

We review our store visit below, showing the second largest department store in Europe in size remains true to its roots of acting as a local meeting point and a city landmark, and does not only rely on tourists for its future.

Company history and background

The Kaufhaus des Westens (German for 'Department Store of the West'), abbreviated to KaDeWe, was founded in 1907 by Adolf Jandorf and Eduard Josef Wertheim. Spanning across more than 60,000 sqm (gross), it is the second largest department store in size in Europe, after Harrods in London (92,000 sqm) and before the Galeries Lafayette Cuppola building on Boulevard Haussmann (45,000 sqm). However, a large specificity of the store is that it dedicates a large portion of its surface to non-retail activities, which explains why KaDeWe falls second to Galeries Lafayette in continental Europe when it comes to net retail surface area (40,000 sqm, the same as Selfridges’).

Contrary to many of its European counterparts which started earlier but on a smaller scale and then grew, the store has been spacious since its inception, as it already spanned across 24,000 sqm at its opening. Severely hit during WWII, with even a US bomber crashing into it in 1943, it took until 1956 for its full reconstruction and the store quickly became emblematic of the material prosperity of West Berlin versus the eastern part. The store then doubled in size between 1976 and 1978, reaching 44,000 sqm, and finally added a seventh and eighth floor in 1996, reaching the current store size.

While the founders were pushed out during WWII due to their Jewish origin, the store was transferred before the war to a company called Hertie, acquired in 1994 by KardstadtQuelle AG, which renovated most of the floors between 2004 and 2007 in order to prepare the store’s one-hundredth anniversary. The Kardstadt premium division, which included KaDeWe, Oberpollinger in Munich and Alsterhaus in Hamburg, was then purchased by Signa Group in 2013 for €1,1bn. Signa then sold a majority stake to Central Group in 2015.

Central Group does not release numbers by department store companies. The KaDeWe group was reported to achieve a total turnover of €600m a year pre-pandemic, achieved 42% through fashion and 14% through food, a category that has been a centrepiece of the store since 1995. In terms of clientele, KaDeWe achieves its turnover through 80% of locals, and a mix of 10% European and 10% international tourists.

The KaDeWe group has been led since 2014 by Andre Maeder, a seasoned Swiss executive who started his career in the discount fashion company Charles Vögele, and who then moved to Harrods, S. Oliver, Hugo Boss, and Kardstadt. The group expects to surpass its pre-pandemic levels in 2023.

Visiting the store: making sure locals and luxury customers go up in the floors

We visited the KaDeWe store in mid-November, a day before its official inauguration after a few years of work to revamp the building. This is the reason why, at the time of the visit, Dior hoardings were covering all windows, as the brand’s takeover of the façade (similar to what has been done with Harrods at the same time) was to be revealed during the inauguration.

The whole store, while being extremely large, paradoxically gives a feeling of intimacy when moving from space to space, once the monumental entrance and luxury section have been passed. This is likely thanks to the revamp conducted by architectural company OMA (Rem Koolhas) in 2021. OMA divided the store into 4 quadrants per floor, each of them corresponding to a different street entrance (including two new ones on opposite sides of the building that were opened during the reconstruction work). Each quadrant has its own core void acting as an atrium where a monumental staircase has been built. All four staircases are also unique, allowing each to convey a distinct atmosphere between quadrants on the same floor.

On the ground floor, from the main entrance on Tauentzienstraße, visitors are immediately welcomed by the Cosmetics area, which is quite graphic and spectacular with a combination of generic signage and branded walls. Interestingly, the beauty section used to be in the back, and luxury accessories were sitting in front of the entrance: a switch was decided in order to make the entrance more welcoming with more entry-price point products.

Given the fact that the cosmetic section is surrounded by the luxury accessories juggernauts, some brands were encouraged to develop new concepts in order to ‘melt’ into the general concept. For instance, Louis Vuitton, which is in direct eyesight from the entrance, has a shop with transparent walls, which is unusual for their typical department store presence. The other brands are all displayed in their own shop-in-shops alongside two pathways running across the entire length of the store, giving a sense of perspective. Each brand was invited to display a new concept: for instance Burberry built the first store with its new concept in Germany.

The perfume section, designed like a boudoir featuring international specialist brands (Byredo, Francis Kurkdjian, Byredo…) appears almost by surprise, as it is not visible from the entrance. Its design reinforces a sense of intimacy which is surprising considering it lives on the 7,000 sqm ground floor of such a large department store. The path naturally leads to a 200 sqm work in progress section, which will house more beauty and jewellery brands, followed by a watches and fine jewellery section (including the Hermès store, as the brand specifically requested to be in the back of the store in this section), that was redesigned in 2020 with an extremely luxurious execution. Two elements were noteworthy there:

-    The Bücherer second-hand section, which felt like a luxury boutique without any taste of vintage or second-hand feeling, leading to the fact that customers were more looking for rare treasures than bargains in this section,

-    The bar, operated in partnership with the Waldorf Astoria, is also extremely luxurious and gives a taste of what awaits during the visit, as each floor has, at minimum, one bar to encourage time spent in-store as well as repeat visits.

The first floor is dedicated to men’s fashion and has an entirely different feeling, as each of the 8 floors of the building have been redesigned by a different architect. The notion of quadrant is even more perceptible here:

-    A vibrant fashion section mixes shop-in-shops with brands’ concept (including the only Jacquemus and Dior Homme shop-in-shops in Germany) and generic areas signalled only with a brand logo,

-    The dressy section has a very cosy feeling, including the new Zegna store concept,

-    The formal section feels a bit older and will be upgraded in 2023,

-    A very large shoe section with floating display units in the middle and peripherical shop in shops all around, feels very luxurious and reminds us the quality of the Shoe Level execution in Dubai.

The second floor is dedicated to women’s fashion, and feels less organised, due to the upgrade of the whole floor remaining unfinished. While the international fashion has a very enjoyable atmosphere thanks to its musical background (as surprising as it might sound, Andre Maeder had to force the store to air music in its aisles when he arrived) and Art Deco design, the classical fashion feels somehow disconnected. Transitioning from one space to another feels sometimes brutal in terms of design, ambiance and even music. While the international fashion section favours open generic areas with cool brands, the classical fashion section displays a series of semi-closed shop in shops in central sections, and as a result, the general feeling is less modern than what the first floor conveys.

In the central section of the floor, a hoarding hid (at the time of visiting) the new Dior popup, organised as a part of the store take-over, which covers 200 sqm and is designed to give the illusion of a boutique. Pop-ups are an integral part of the store policy, as at any given moment there are 40 active popups in the store, dotted across the floors.

The third floor is dedicated to Accessories and Shoes for women, including lingerie, surprisingly accessible immediately adjacent to a staircase and next to bags. The design of the floor gives a large perspective allowing the eyesight to go far, which encourages one to discover and explore the aisles. Some cosmetic brands are repeated on the floor, as well as some jewellery brands, next to beauty service, VIP shopping and a soon-to-open hairdresser, who is a household name in Berlin. The accessories section is completed by a large Luxottica eyewear shop-in-shop, and the shoe section which was refurbished in 2014 and feels extremely modern, luxurious and airy (it was one of the first section to go through such an upgrade). The size of the luxury brands concessions is surprising, as Chanel, Louis Vuitton, Dior and Gucci all have 70 sqm each to display their shoes and accessories, which contributes to giving a very luxurious feeling to the space.

The fourth floor includes sport, kidswear and toys, travel accessories, a library, an outlet and seasonal animation.

The decently large sport section is actually a popup as KaDeWe wanted to test the category, with a fairly high quality of execution. When visiting, it did not feel like a popup at all and the management is currently thinking about  keeping it as it is and move forward with new brands. It is efficiently decorated with dynamic fixtures and decorative flooring that reproduces a running track (also seen in El Corte Inglés Castellana and in Attica city centre stores).

The kids section is vast, and includes fashion (both through generic displays and branded shop-in-shops) and toys in a series of rooms that hide the immensity of the offer. It naturally leads to travel accessories and bags, including luxury luggage brands such as Rimowa.

The outlet section is well executed and “clean”, with products sorted by brands and sizes (including LVMH and Kering brands). A sense of visual merchandising both on the racks and on the mannequins and well-maintained fitting rooms help avoid feeling like a second-class customer.

Finally, the 100 sqm Christmas section is very immersive, and displays an own-bought selection of products.

Overall, this entire floor is extremely immersive as each of the universes work well, however, transitioning from one to another can be somewhat brutal.

The fifth floor is dedicated to homeware, tech and stationery. The home offer used to be displayed on 2 floors and was regrouped into something more coherent and homogeneous. The space is divided into kitchen, bathroom and bedroom subspaces, going from mid-priced brands to luxury ones (including the only Hermès tableware shop in shop in Germany). The floor also houses a Global Blue Lounge.

The sixth floor is entirely dedicated to restaurants and delicatessen, including a tobacco and lotto shop. This is a traffic driver as there is virtually every price level as well as food choices, from Veuve Cliquot and Chandon shop-in-shops, to Ladurée tea salon, a 2,000 sqm sweets shop, a German deli, a beer garden, and 30 restaurants including a caviar bar available across the floor, totalling 7,000 sqm. The gourmet offer used to be on the fifth floor for 60 years, yet now has been concentrated on the sixth floor with restaurants and F&B, as the retail offer reclaims the space formerly dedicated to offices.

Interestingly, it is possible to access parts of this floor outside of the store’s opening hours via a special lift, which also leads to an art gallery where pieces costing as much as €50,000 have been sold. The German deli remains open at night, as well as 6 restaurants and 2 bars, open until midnight.

60% of visitors come up to the floor, which represents 12m visitors a year and 15% of the total turnover, via a model split 20/80 between concessions and wholesale, while the ground floor is almost 100% concessions and the store in general is 50/50.

The seventh floor is dedicated to a winter garden under a beautiful glass ceiling, and includes a self-service restaurant, but there are signs that this space is also about to transition to another usage. Off limits, the floor also houses the spectacular in-house food production plant, as many items are produced on the premises. For instance, all Lenôtre cakes are produced in the store, as well as all restaurant food. Interestingly, there is currently not much advertising focused on the fact that the food is the freshest possible as it is prepared from raw ingredients on site.

What’s great and what’s next

As a whole, it can be surprising to see such a level of execution and such a display of luxury goods and experiences for a city like Berlin. It shows both that the market is changing, and that there are some expectations in terms of new flows of tourism. Even though Central Group’s size might have helped, convincing so many heavyweights from the luxury industry to accompany such a grand vision is no small feat, justifying KaDeWe’s ambitions to become not only a luxury destination store in Continental Europe, but also a jewel in the Central Group crown.

Without any doubt, the revamp of KaDeWe is spectacular, as it involves many structural redesigns, in addition to new concepts and brands. Even though international luxury brands are all displaying their best in terms of concept and product offer, one can feel that the strategy does not only rely on tourism, as the store is built to be more than just a place to shop. It also invites customers to trade their most precious currency: their time.

To achieve that, the strategically located and perfectly executed bars and restaurants dotting each floor are helping, as they bring some breathing space during the shopping experience with a specific flavour each time. The 6th floor is also spectacular, and its ability to draw 60% of traffic from the ground floor is certainly a prowess, even if the cool staircases (including the OMA-designed which is bound to become iconic with time) also help.

As a consequence, KaDeWe remains a place for locals where they can gather around a beer or a Louis Vuitton bag, even during evenings (at least for the beer) when the store is closed. This guarantees that the connexion between the store and 80% of its clientele (locals) is not hampered by a luxury upgrade of this magnitude.

Another interesting development to watch will be the opening of the new Lamarr department store in Vienna by KaDeWe group, scheduled for 2024 (20,000 sqm, also designed by OMA). It will be interesting to see how the innovative features seen in KaDeWe Berlin, dictated by the weight of history and structure, will be translated into such a blank slat.

Going further on KaDeWe:

KaDeWe celebrates 115th anniversary

KaDeWe’s Berlin new concept

Central Group and Signa unveil luxury department store in Vienna

Credits: IADS (Selvane Mohandas du Ménil)