Shopping Centre

Retailer Spotlight: Deichmann Shoes

Published:  17 March, 2010

On the back of sharply increased turnover in the UK, Deichmann Shoes has announced plans to open ten UK stores in 2010, twice the number it opened in 2009.

The family-owned German retailer’s UK arm generated £32.02m in turnover during the 2009 calendar year, up 46 per cent from £21.9m in 2008. It sold 2.35m pairs of shoes in the UK last year; a 30 per cent increase on the previous year. Like-for-like sales increased by 10.5 per cent.

UK director Andy Underwood said: “We are very pleased with these results. Our expansion activities clearly paid off in 2009. We are convinced this market will continue to offer strong opportunities for us.”

And he added: “Whether shopping for women’s, men’s or children’s shoes, people will always want good quality, fashionable items at fantastic prices. Our aim is to make fashionable shoes affordable and accessible to everyone.”

The company opened six new stores during 2009 in locations including London’s Westfield Shopping Centre, Merryhill Shopping Centre in the West Midlands, Union Square in Aberdeen and The Centre in Livingston, where Deichmann agreed a ten-year lease on a 5,767-sq ft, dual-floor unit. At the year end the UK portfolio stood at 37 outlets and Deichmann intends to open ten more outlets during 2010, the year marking Deichmann’s tenth anniversary in the UK.

According to property manager Robert Field, the latest acquisitions underline the fact that Deichmann’s property strategy is firmly focused on prime space, whether on the high street or in shopping centres.

Although it operates from some retail parks and secondary town centre pitches, Field said Deichmann now requires prime units of 5,000 to 6,500 sq ft, with a minimum sales area of 4,000 sq ft. A minimum frontage of 33ft and full height glazing are also prerequisites, he says.

The Deichmann style of retailing differs from the conventional British shoe shop: shoes are displayed in pairs, and all the stock is held on the shop floor, meaning that customers do not have to wait for an assistant to be served.

And it is not just in the UK that Deichmann is on the acquisition trail. The company has long been the market leader in the European shoe retail trade and now the USA is its second-biggest market outside its native Germany. Deichmann employs more than 28,000 people in 2,767 stores worldwide.

Last month Deichmann Group announced that global turnover had risen by just under 9 per cent in 2009 from €3.1bn to €3.4bn. Shoe sales increased by 8.3 per cent; from 127 to 138 million pairs. 2009 saw Europe’s biggest shoe retailer open 282 new shops in Europe and the USA.

Chairman of the group administrative board, Heinrich Deichmann, said: “We have surpassed the goals targeted for 2009 despite last year’s financial crisis. This has confirmed our strategy to continue the pace of our expansion plans. Furthermore, we can continue to finance our expansion programme without the need for third-party capital.”

The Deichmann Group, based in Essen, Germany and founded in 1913 is still entirely owned by the founding family. Heinrich Deichmann is the third generation of the family to run the business, but it would be wrong to characterise Deichmann as a typical European dynastic retailer: it is a business with a conscience and profits are channelled into its own charitable foundation, Wort und Tat, which aids some of the poorest communities in India, Africa and parts of the former Soviet Union.