Globus boss talks about the Benko drama and the luxury allegations

As of this week, the Globus department store business is fully owned by the Thai Central Group. She probably didn’t pay much for it. What is more valuable: globe or the most expensive handbag you sell?

Franco Savastano: The negotiations went on for a long time and we are relieved that a conclusion was reached. I can’t say anything about the price, but the operational department store business is of course less important compared to the real estate.

A year ago, René Benko’s entire house of cards, who owned half of Globus, collapsed. They have never commented on it in all this time. But now you can unpack. Please . . .

We were also surprised by the extent of the media dynamic. Something came out every day. But Central sent out the message very early on that they wouldn’t let us down. That was very important for us.

Did you personally always believe that Globus would survive?

Yes, I have that. But we knew it would be extremely difficult. We had to keep our employees, our customers and our partners on board at the same time. When everything is so negatively charged, you never know who else will want to work with you.

Have you met René Benko in the past year?

No.

What would you have said to him if you had met him?

It wouldn’t be fair if I said now that everything René Benko did was a catastrophe. He also built something. It was just about the way he built it. It’s just a real shame what happened.

Half of their main house in Zurich still belongs to René Benkos Signa. Does this affect your business?

We signed a long-term rental agreement in 2020. That’s why we’re relaxed.

In connection with Signa, we kept hearing about rents being too high. Is Globus paying too much?

Here in Zurich we certainly pay a lot. But I generally think that rents are paid too high in the retail trade.

Have you not been able to renegotiate the rent yet?

That will definitely come.

The high rents were there to drive up the value of the Signa properties.

That was the business model. The long-term leases and high rents resulted in higher property values.

Have you ever thought about giving up begging?

Never. For me this is a question of character. I’m not just CEO when things are going well. But also when it is difficult. Don’t forget that we also had the Corona crisis before that. That wasn’t easy either.

But there were many departures from Globus.

It is the case that we have had some departures in higher positions. I understood that. We couldn’t recruit. . .

Why not?

How do you plan to get people into top management when there is so much uncertainty surrounding a company? They’re all just waiting. To achieve this, we promoted many internal employees. This triggered a positive dynamic in the company.

What other collateral damage was there?

We are not damaged, but we felt the pressure. An example: Our primary goal from the start was to maintain enough liquidity. I set up a new regime with the finance chief. Everything went over our table. Every investment, every new job, every purchase. That worked well. But then KaDeWe went bankrupt. . .

 

The luxury department store KaDeWe in Berlin is a sister company. It went bankrupt in January. Was Globus affected by this?

We knew then: Now we have a problem. We have around a thousand suppliers. They suddenly only wanted to deliver everything against advance payment. But that’s impossible, we have to generate the money first.

What happened then? Have you lost tokens?

I personally picked up the phone and, together with our purchasing team, called every major partner for four or five days. I gave them my word: “We’ll pay you, but we can’t do it in advance. If there are any problems, I will inform you immediately.”

Did that make a difference?

Of our thousand suppliers, only 20 no longer took part. 15 of them are small producers who were almost dependent on us. They couldn’t take the risk. I understand that.

It seems like things have gotten personal.

Absolutely. I’ve been in this business for 40 years. I have been working with certain suppliers for 20 years. I put my reputation on the line for Globus.

Has your business overall suffered from the situation?

We do 65 percent of our business with regular customers who have a loyalty card. I didn’t see a big change in them. They tended to buy even more. But I assume that there was also a type of customer who stopped shopping with us because they hated the Signa situation. Overall, sales were stable.

No growth even though everything has become more expensive?

You yourself know that inflation has increased. Housing in particular has become more expensive. This also affected our customers.

But Globus has a clientele that can take it in stride.

I know what you’re getting at: Globus is just a luxury.

Isn’t that true?

We only have one or two floors in Zurich and Geneva that are truly luxury. That’s around five percent of our sales area. The rest is premium.

For people, Globus is only one thing: luxury.

We have repositioned the ground floor in Zurich. We used to sell umbrellas there for 20 francs each. Today we carry Louis Vuitton there. Now they say: “They only focus on luxury.” But that’s not true.

Did you miscommunicate?

We’ve changed a lot recently. We were forced to do this because we lacked new customers. And we had to adapt to their tastes. But perhaps the change came too quickly for some regular customers.

By change you mean: expensive brands.

Globus used to be product-driven, today we are brand-driven. People love brands. In the middle segment, where we used to operate, suppliers are dying out. Because today it is occupied by chains from Spain and Sweden.

You mean Zara and H&M.

We also used to have our own brands. But we were far too small to keep up. So we have to step it up a notch. We always focus on the customer. And he wants brands. So why shouldn’t we offer them? Since we started selling Louis Vuitton and other luxury brands on the ground floor in Zurich, our space productivity has doubled.

The luxury industry is starving after massively increasing prices. This now applies to you too.

The entire luxury industry has increased prices. However, for us it was only moderate. Yes, there are brands that have increased their prices exorbitantly. They are suffering a lot now. Luckily we don’t have any of these brands.

You recently offered a ten percent discount on all your groceries. But even with that, a pack of pasta still costs twice as much as in the Coop.

If you compare us to the Coop, we’ll lose anyway. We are different from Coop. We want to offer our customers something that they cannot find anywhere else. I could tell you a story about each of our products. In addition, our food department Delicatessa has always been positioned this way.

When will you finally be in the black?

End of 2026. For this we need the store on Zurich’s Bellevue, which we will open in November. And the globe in Basel, which will open on November 1st, 2025. Then we have much more volume with similarly high fixed costs.

The Thai Central Group, which now fully owns you, has remained a phantom throughout the Benko crisis. Who is Central?

It is a relatively large family that does not seek the public. But they are close to the business and understand it well. We have an intensive exchange.

The Thais are considered hierarchical.

I have been working intensively with them for four years. When they come to Switzerland, we travel by train together. I don’t have to organize limousines or anything. And when they walk through the house, they talk to the employees. They have no conceit. We may do something submissive when they come, but that’s not their fault.

Home office has been canceled at Globus. Was that the Thais’ decision – or yours?

It was my decision. We have almost 200 employees working in the offices. The remaining 2,500 work in the stores. Maybe I’m old school, but we mustn’t forget: We make money with our people in sales. The new directive is: One day of home office per week, but not on Monday or Friday. I am absolutely of the opinion that the days of working from home are over.

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