Struggling Giant Sends Warning Signal: Germany Falling Behind

The grandeur of “Ka-de-Wa,” a massive German department store in West Berlin, belies the turmoil within. While on the surface everything appears to be running smoothly, with shoppers pouring through its doors and luxury brands on display, a closer look reveals a different story. Empty shelves and bare walls are becoming increasingly common on the fashion floors, with vendors pulling merchandise and some stores only accepting payment by credit card.

The fate of the department store, which spans seven floors and 60,000 square meters of commerce, remains uncertain. Cigna, the Austrian real estate company that has owned it for a decade, filed for bankruptcy last year due to specific business reasons such as rapid expansion, expensive financing and mismanagement against the backdrop of a slump in the commercial real estate market. This symbolizes Germany’s dismal economic situation today.

The latest data published this month show that the German economy contracted by 0.5% in 2023. The government has tried to address this issue with assessments and reassessments but has not yet come up with a concrete plan for recovery. Meanwhile, politically, extremist parties are gaining strength in the polls as they have not been since the establishment of the Federal Republic of Germany in 1949. The far-right “Alternative to Germany” party and the far-left “Sarah Wagenknecht Alliance” together win 25% of the vote according to recent polls.

This year’s regional elections and European Parliament elections may translate public unrest into radical political change. The department store’s troubles reflect those of Germany – it is hardly sold through online platforms (it only started selling online in 2020) and is struggling to survive after two years of Corona shutdowns where online trade has soared and non-German economies have already recovered. According to its manager, there is a future for “ca-de-va,” just not in its current form. With normal rent payments, he believes it can have a promising future ahead.

By Editor

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