From a department store group with ABM to a luxury destination

Today, Globus in Zurich represents a world of luxury with expensive bags and an extensive delicatessen department. But with the glamor of Bahnhofstrasse, it’s easy to forget that the department store group once also consisted of less glamorous shops.

Anyone who grew up in Switzerland in the 1960s, 1970s or 1980s almost certainly wore clothes from the ABM as a child. The inexpensive small department stores that belonged to Globus were an important supplier of children’s fashion.

At that time, Globus did not only consist of the nine department stores, whose operations have now been completely taken over by the Thai Central Group. Globus was a family-run, broad-based retail group. Subsidiaries included the furniture store Interio, the office supplies retailer Office World and ABM.

The name of the chain stood for “Au Bon Marché” – popularly also jokingly for “Everything is cheap crap”. Globus founded ABM in 1956 based on a foreign model. The stores had a manageable range of clothing and household items at affordable prices. They were a complement to the higher-priced Globus department stores – and made good money.

Oversleep renewal

But it was the subsidiary ABM that helped herald the end of the entire Globus Group as an independent company in the late 1990s. The chain, which accounted for around a third of the group’s sales, had slipped deep into the red.

Because of its many years of success, ABM had missed the opportunity to renew itself. The environment in Swiss retail had changed. Initially, national competitors such as Spengler or Migros, and later international ones such as H&M and C&A, created competition in the clothing business. An ABM repositioning with the consultants from Boston Consulting had failed.

 

 

Doubling the sales area thanks to Jelmoli

But there were also changes at the parent company Globus. With the takeover of six Jelmoli department stores, Globus entered French-speaking Switzerland and Ticino for the first time in 1996. Suddenly you were no longer just a German-speaking Swiss department store company, but a national player.

Globus hoped that the move would result in more favorable conditions for purchasing goods and a better distribution of fixed costs within the company. But doubling the sales area and integrating the new branches was a major challenge for the family company.

There was also an emergency in terms of personnel. Shortly after the resignation of long-time patron and Globus President Rudolf Bitterli, his successor Ulrich Zollikofer was absent from one day to the next for health reasons and did not return to the business.

Only one way out

In this dramatic situation, the original owner families saw no other way out than to hand the company into other hands. And so the Mahler, Bitterli, Schmidheiny families and other shareholders sold their majority stake in the department store group to Migros in 1997.

The purchase price for the company, including the real estate, was 700 million francs in the media at the time – that would be about as much as the rather overly proud valuation of the headquarters on Bahnhofstrasse in recent years.

The deal also had an impact on the ownership of the Glattzentrum. The property originally belonged to one third each of Migros, Globus and Jelmoli. Globus later took over the Jelmoli share and owned two-thirds of the shopping center. With the Globus purchase, Migros became the sole owner – and later sold it to Swiss Life.

 

Proud “Globians”

The fact that the largest Swiss retailer took over the scepter at Globus caused uncertainty in the previously manageable department store world. Globus was a family-run company that looked after its employees. People were proud to be a “Globian” – and now they were suddenly supposed to become part of the Migros colossus.

The NZZ also had its doubts. “Not inspiring” was the title above the comment on the takeover. The paper was skeptical because Migros wanted to keep Globus listed on the stock exchange. The editor asked himself how a listed company fits in with the “pragmatic sales and profitability thinking” of the cooperative Migros as well as its “sociopolitical mission beyond pure profit orientation”. This balancing act was resolved when Migros soon bought the remaining titles and took Globus off the stock exchange.

However, the fears within the department store company soon dissipated when the Migros management announced the slogan “Globus remains Globus, Migros remains Migros”.

The buyer stuck to this. Affected management employees attest that Migros acted fairly after the takeover. If an area gave good results, you were left alone.

 

 

Flop mit Oviesse

Of course, that didn’t apply to the problem child ABM. But the renovation didn’t work under Migros either. The chain closed in 2003.

The plan: The ABM store areas that are no longer needed should be filled with branches of the Italian clothing chain Oviesse – supplemented, depending on the space, by Estorel drugstores or Nannini cafés, as a franchise of the family of the singer Gianna Nannini from Siena. But it soon became clear that the Oviesse thing was going to be a flop and the exercise was canceled.

However, the conversion of the former ABM department store on Bellevue in Zurich was a great success. There, Globus focused on gastronomy under the motto “Fast Food for the Gold Coast”. Other ABM stores were converted into Herren-Globus or Interio branches, and a dozen or so became C&A stores.

Even ten years after the takeover, Migros left the Globians alone for the 100th anniversary celebration in 2007. Participants still fondly remember the lavish party for all Globus employees in Event Hall 550 in Oerlikon with an Abba cover band and singer Michael von der Heide.

Away with Globi and Interio

However, there was less and less reason to celebrate. The Globe Empire shrank. The group’s holdings were sold off one by one. The Globi publishing house was sold, as were the office supplies retailer Office World and the furniture store Interio.

The old advertising slogan “If you count, you buy on the globe” was no longer true for many customers in an environment with ever lower clothing prices. Looking back, Globus would have been better off giving up its ambitions in the clothing sector earlier than buying up the Schild fashion house in 2013 and taking over the shoe and fashion brand Navyboot at the beginning of 2019.

Just a few months later, Migros management came to the conclusion that Globus had “less and less points of contact and synergies” with the retailer and was looking for a buyer.

She found this at the beginning of 2020 in the Thai Central Group and the Austrian real estate entrepreneur René Benko. As soon as the two had taken over Globus, they further trimmed down the group: the former Schild and Herren-Globus stores as well as the newly acquired navy boat ended up with the Valais fashion retailer Bayard.

 

Luxury and brands are given more weight

All that was left of the former globe cosmos were the department stores. Since the Thais and the Tyroleans took over, the spirit of Globus has also changed. The new owners answer the question of what a department store is differently than Migros, not to mention the old Globus owners.

Instead of targeting the Swiss middle class, in recent years the houses have focused more on a more upscale clientele. Today, international brands have greater weight at Globus and influence the presentation in stores, especially in Zurich.

In the past, the focus was on meticulous coordination of the range for a perfect overall picture across all areas. This included the country campaigns. Since the mid-1950s, these have been a means for Globus to introduce customers to products from exotic countries (India) or closer destinations (Italy). The elaborate – and expensive – appearances were an important marketing tool.

The new building for the Globus main store on Zurich’s Bahnhofstrasse, which opened in 1967, was considered to be groundbreaking in department store design throughout Switzerland. The architecture made the staging of so-called worlds of experience possible. Now it is entirely up to the Central Group to play this stage optimally.