Friday, July 18, 2014

Tiffany's or Target, and Nothing in Between

Life Preserver for Karstadt
Department stores have had a tough time during the past few years. Part of the problem has been increased competition from online retailers and a lackluster economy. The problem is especially pronounced for retailers catering to the middle class. High-end and low-end stores seem to be doing fairly well (Nordstrom and Tiffany's, and WalMart and Target).

Some analysts attribute the problem facing retailers such as Sears and JC Penney to the shrinking American middle class. Whatever the cause, the problem isn't confined to the USA. Karstadt, one of Germany's major department store chains, has been having financial problems for a number of years and could close its doors by the end of the year. There are 83 Karstadt department stores throughout Germany, employing approximately 32,000 people and serving around 1.6 million customers daily. Started in 1881, Karstadt is a cultural institution. For many towns, Karstadt is not just a store but a social hub for the community. 

The loss of Karstadt, and department stores in general, makes me sad. Department stores were an integral part of my childhood. Visiting a department store was like visiting the Land of Oz. It was full of wondrous and exciting things. I remember eating at the department store restaurant with my mother. (I would always order the open face turkey sandwich with dressing and all the trimmings.) Although there are more restaurants and eating options in my home town today than there were when I was a child, the department store cafe was a special experience that is disappearing along with many other experiences department stores brought us.

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