But the attraction in the city of Osnabrück is closed because of the corona crisis. “It is currently spooky in the city center,” Rauschen describes the consequences of the state-prescribed shutdown for the city in northern Germany.
It could look similar in many German cities after the end of the corona crisis. Because experts assume that many retailers will not be able to cope with the week-long closure of their shops.
In addition, since many restaurateurs are threatened with the end, there is a risk that the vacancy rate in many city centers will accelerate and that they will become less attractive. The bitter consequence: fewer visitors come to the centers.
“In order to maintain the attractiveness of city centers, a functioning fashion trade is very important,” says Klaus Harnack, partner of the management consultancy Hachmeister + Partner. “This also benefits other sectors that are important for the vitality of cities, such as gastronomy,” emphasizes the consultant.
Bankruptcy wave is expected
But this colorful mix of fashion and other shops and restaurants could change dramatically in the next few months. “At the end of the year at the latest, there will be an unprecedented wave of retail bankruptcies,” says Harnack. He worries that about a third of the companies will not survive the consequences of the corona crisis.
For years, fewer and fewer people have been coming to the cities to shop. In the past five years alone, the number of stores in German retail has declined by around 29,000, according to the Handelsverband Deutschland (HDE).
“Every fifth company in Germany could go bankrupt”
This is due to the growing online business, but also to the fact that the inner cities are becoming more and more the same, because the same chain stores are everywhere esprit about HM to Zara shape the picture – and give up smaller retailers.
In addition, even large corporations such as Galeria Karstadt Kaufhof are at risk. Germany’s largest department store group recently registered a protective shield procedure. The retail giant wants to protect itself from creditors’ claims in the corona crisis.
Difficult times for landlords
This not only affects the big German cities. “The smaller the locations, the more difficult it becomes,” says Eckhard Brockhoff. The entrepreneur from Essen sees himself as the largest regional commercial broker in Germany. Many medium-sized towns had already struggled in recent years. But now the situation is even more explosive.
The broker sees hard times especially for some landlords. Some will lose their tenants because they have to file for bankruptcy. Others are trying to suspend the rent in the coming months with reference to the corona crisis. It may well be that many retail chains wanted to permanently lower their rents afterwards, says Brockhoff.
In the past few years, retailing in city centers had been increasingly replaced by restaurants and takeaways. “Food is the new shopping” is the motto of many neighborhood developers, observes Michael Lidl, partner of the hotel and catering consultancy Treugast.
However, Corona could also partially break off urban catering. The risk of the gastronomic landscape becoming deserted already existed before the crisis. But “such a process is accelerated by the corona crisis,” says Lidl.
Hermann Weiffenbach, the founder of the Enchilada Group from Munich, agrees with this opinion. The entrepreneur and franchisor for around 90 restaurants nationwide fears: “We will experience an insolvency wave in the catering trade. It will hit the small restaurateurs in particular, who generally have no reserves. ”
Fashion brands fear for retailers
International chains could last longer financially. A variety of restaurants, ice cream parlors and cafés are just as important for lively city centers as a wide range of retail outlets.
In order to prevent the store from dying, many companies in the fashion industry have now joined forces. This includes Mark Bezner from the shirt manufacturer Olymp as well as the bosses of the men’s fashion brand Brax and Michael Hirmer, managing partner of the Munich textile house of the same name.
“The overriding goal is to maintain vital inner cities in Germany with an almost unique mix of retail, catering and cultural institutions,” write the authors of a thesis paper, which also includes large associations such as the Federal Association of German Textile Retailers.
Given the expected losses this year and next, loans would not be enough to avert an unprecedented wave of bankruptcies. Retailers and manufacturers would be hit existentially and there would be a devastating domino effect. So it is about the preservation of 440,000 jobs in retail alone with clothing, sports articles, shoes and leather goods.
Austria as a role model
The fashion companies are demanding compensation for the pecuniary damage they suffered as a result of the closure of the shops due to the corona crisis. They refer to the Austrian model.
There, for example, initially granted loans can be converted into grants. In addition, grants can be paid regardless of previously granted loans.
Because according to calculations by Hachmeister + Partner, it can be assumed that the retail sector will only slowly recover after the stores have opened. Depending on the scenario, the drop in sales in May will be up to 50 percent compared to the previous year.
A drop of 40 to 50 and 30 to 40 percent is also expected in June and July. Therefore, the dealers could hardly pay rent, personnel and energy costs.
Above all, companies have to prepare for the reopening of the stores. “We are preparing to prepare enough disinfectants, masks and plexiglass panes to protect against spills at the cash registers,” explains Mark Rauschen, head of L&T in Osnabrück, about the huge changes that the corona epidemic will bring to the retail trade.
“We will not experience the ease of shopping in the past,” feared Rauschen. It will take some time before as many visitors as before the crisis will make a pilgrimage to the house with the surf pool.
More: More and more chain stores no longer pay rent.
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