It will take at least a year to digest the corona crisis, says CEO Armin Devender of Galeria Inno, the Belgian branch of German department store chain Galeria Karstadt Kaufhof. The strategy for the future is clear: stores will be adapted to the local customer, with a focus on new visual merchandising, the company will open an online marketplace and is in talks with new partners in the food sector.
“We have fought day and night”
Mr. Devender, where is Galeria Inno today?
"Due to the hard work of the past weeks, I am sure that Galeria Inno will emerge stronger from this unpredictable crisis caused by the coronavirus. Over the past seven weeks, we have literally fought day and night with a small team for this Belgian icon and will continue to be there for our loyal customers in the future! Therefore, relief and a bit of pride are finally spreading again across the entire team. I am very grateful for this fantastic achievement. But it is also clear that something like a restart is now pending for all employees, because nothing is as it was before the shutdown started."
What are the effects of the corona crisis on Galeria Inno?
"We assume that the corona crisis will lead to a high loss in turnover this fiscal year. In order to survive such an unpredictable and dramatic erosion of sales, all stakeholders must pull together. And that happens too. We had closed our stores a day before the Belgian government forced us, in order to protect the health of our employees and customers. This also means that 97 % of our employees have been in temporary unemployment since the closure. As management, we are aware of what these employees have achieved and that we would not be able to talk about the future of Inno today without all of this. And of course I would also like to name our partners who have stood by our side during the weeks of closure. Last but not least, we have the clear commitment and support of Galeria Karstadt Kaufhof as the owner. Now we are so happy to be there for our customers again."
“Save as many jobs as possible”
Will there be job cuts?
"One thing is clear: our goal is to save as many jobs as possible, but of course this long closure has had a significant impact on our company. We still cannot assess how the business will start again after the reopening and how traffic will develop in our cities. In addition, the crisis is not over, even if we can open it again. In any case, we have to control all costs very closely and strictly."
How long will it take you to overcome the financial consequences of the closure?
"Before the crisis, we were above the previous year in all relevant key figures. We want to go back to the right track with all our might, but we are aware that it will take us at least a year to do this. In order to remain fully capable of acting during this period and to continue on the path we have chosen, we have set up a stable financing structure. As part of the new strategy, we had launched 21 projects that will make Galeria Inno a modern and fast dealer in all areas. And despite the closure, we continued to work hard on all future projects and even accelerated some. These projects will ensure sustainable growth in sales and earnings in the coming years."
“To become the leading omnichannel department store”
What is your strategy for the future?
"Inno operates a business model that has been successful for years as an up-market department store: this goes hand in hand with a high level of service quality and excellent customer orientation. The new strategy expands our offline business to an online marketplace. This will enable Galeria Inno to become the leading omnichannel department store for national and international customers in Belgium. In other words, we will develop Inno into a fascinating marketplace for all Belgians, where wishes arise and come true in an inspiring atmosphere that appeals to all the senses."
Will you also bring new partners on board?
"Due to the successful concept of Galeria Inno, there are exciting companies from the food sector that are interested in a partnership with us. Here we are already in the first talks. Such a partnership would further increase the attractiveness and the popularity of our stores."
“We are reinventing Galeria Inno”
This further development will also increase the attractiveness of Galeria Inno as an employer...
"Yes: we want to become one of the best employers in Belgium, as a company that is interesting for young professionals and offers a modern corporate culture with flat hierarchies. We have created important prerequisites for this, with efficient and modern processes. Our common culture is very important to me and the entire management team! It will be extremely exciting to be on our way to the future and maybe even this crisis has contributed a bit, because in such a situation you grow together and question many 'old braids'. We can say that together, we are reinventing Galeria Inno."
Mr. Devender, one last question, why is a positive further development of Inno so important?
"As the only department store in Belgium with a wide range of premium brands, Inno has been an integral part of the retail landscape of all major Belgian cities for almost 125 years and has accompanied the Belgians in their everyday life for generations. Galeria Inno is simply indispensable for people. And of course we are also a reliable and trustworthy employer for a few thousand families. Over the past few months, we as management have developed the future strategy for Inno and the transformation of our company into the omnichannel department store for national and international customers. We want to continue this great shared success story! It is our purpose!"
Lannoo Campus will soon publish the book 'The Future of Department Stores', in which retail expert Erik Van Heuven and journalist Stefan Van Rompaey (RetailDetail) explore the world of department stores. Discussions with international investors and managers chart the challenges and opportunities for this fascinating retail sector.