The Swiss department store chain Globus is undergoing significant changes following its acquisition by Thailand’s Central Group, which aims to reposition the brand and realign its market strategy.
Franco Savastano, the current CEO, is set to step down at the end of March 2024 after six years at the helm. His departure was announced this Wednesday, with Pierluigi Cocchini taking over as the new chairman of the board. This shift indicates the Central Group’s strategy to integrate Globus more closely with Rinascente, the Italian department store chain also owned by the Central Group.
According to reports from Handelszeitung, the transition has raised questions about how effectively the new leadership from Italy will address the specific needs of Swiss customers. Insiders have noted the importance of retaining Globus's Swiss identity, highlighting the risk of alienation should the business become too influenced by foreign management. "Globus is a Swiss company, and if it becomes too foreign, customers will notice it immediately," stated one industry insider.
Following the turbulent period after the collapse of the previous co-owner, Signa, which was led by René Benko, the Central Group’s full ownership signals fresh hope for the struggling retail chain. Under Savastano’s leadership, Globus had aimed to establish itself firmly within the luxury segment, developing new store concepts and enhancing the shopping experience to attract both local and international clientele.
Despite earlier ambitious strategies, Savastano has faced challenges, including the need to renegotiate high rental agreements. These rentals, viewed as excessive, were inherited from the management practices of the former joint venture. The department store has consistently reported losses, leading to concerns over its long-term viability.
By appointing Cocchini, who previously managed Rinascente with notable success, Central Group seeks to leverage his expertise to streamline operations and boost profitability. Cocchini has already attained significant achievements at Rinascente, marked by increased sales, and he brings experience from digitizing and revitalizing the brand over the past eight years.
"The new management aims to realize synergies and create closer collaboration between Rinascente and Globus, particularly around marketing to Swiss customers," according to statements from Central Group officials. This effort includes centralizing marketing strategies to promote new store concepts and solidify Globus's positioning within the luxury market.
While the departure of Savastano and the appointment of Cocchini appear to align with Central Group’s strategy of creating operational efficiencies, the company has also emphasized its commitment to preserving all nine Globus locations across Switzerland, even stating there are no immediate plans for layoffs.
"Despite the administrative shakeup, the brand will continue to focus on its luxury offerings and accessible price points, ensuring consistency for its consumers and maintaining its broad appeal," insiders have indicated.
There are also plans for new store openings, with the flagship store at Bahnhofstrasse, Zürich, undergoing significant renovations to amplify its luxury offerings. The newly rebranded stores, focusing on fashion, beauty, and gourmet food, aim to attract younger and more affluent customers, particularly through social media engagement.
Globus's strategy under the new leadership will prioritize maintaining its identity as predominantly serving Swiss clients, unlike Rinascente, which draws its customer base from tourists. Industry experts warn, "While the collaboration may bring benefits, integrating the European retail approach without losing local relevance will be key. If done correctly, it could rejuvenate the brand; otherwise, it risks losing its distinct character."
Looking forward, the goal for the Central Group and the new leadership team is to turn Globus financially stable by 2026. Achieving this will likely require adjusting to market dynamics, addressing any residual uncertainty among employees, suppliers, and loyal customers following the leadership changes, and maintaining the lucrative segments of the business.
With significant potential for growth, the shift marked by Cocchini's ascendance appears to be both a challenge and opportunity as Globus navigates the retail industry’s highly competitive environment.