A well-known and profitable multibrand store in a popular Munich neighborhood. Nowadays you would expect that to be good news. And yet owner Klaudia Burger has closed the doors of her store Slips forever, which she opened in 1990 first of all as Slips Underwear shop in the Fraunhoferstrasse in Munich.
The store–located in the Glockenbackviertel district, which was not exactly the in address at that time–attracted shoppers with brands such as Nikos, Calvin Klein and Armani, offering a stocklist for both women and men.
Seven years later she relocated to the by now widely known Gärtnerplatz, the store name was changed to Slips & Wear, and fashion labels such as Paul Smith and Day Birger et Mikkelsen were added. In 2000 Burger decided to double the amount of retail floor space and to substantially expand the range of goods, especially with premium brands such as Diane von Fürstenberg, Missoni and Giorgio Brato.
"My enjoyment of my work vanished, and I asked myself more and more often why I was still doing it to myself."
Although she remained faithful to many brands, Burger continuously revamped the line-up of labels by adding new labels and stocked brands such as Carven, Kuyichi, Sessùn, Liv Bergen, No. 21, Golden Goose and MSGM.
After 27 years in retail fashion, the 52-year-old business owner, whose formal training is actually as a make-up artist, is ending the show. Ibiza will become the second home of the Munich native, where she plans to open a small guesthouse. Her former store is to become a monobrand store for Italian premium sportswear label Golden Goose.
For our brand new GERMAN ISSUE we talked to her about the reasons, her desire for a change and the situation of multibrand retail in Germany.
Well, Klaudia Burger, do you already regret your decision to close your store Slips?
To be honest, so far not even for a single day. Some predicted I would regret it, but it hasn't happened yet. True, who knows what the future will bring, but I'm not somebody who lives in the past.
Yet, you are giving up a business which worked well for many years, one which also made quite a name for itself. There must be a reason for that. Why is it that you're getting out?
To continue being successful, quite a lot of new investment would be needed. Unfortunately, the development in recent years of fast fashion and online shopping has led to a situation where my work and that of my staff is being valued less and less by the majority of customers. As a result, my enjoyment of my work vanished, and I asked myself more and more often why I was still doing it to myself. Half the customers on any day completely destroyed my enjoyment of my work. When that happens day after day and there is more negative than positive, it becomes difficult to motivate yourself and your employees again and again.
I would like to hear a few examples of how people upset you...
The biggest problem was that it was becoming more and more difficult to sell goods at the regular price. I would like to say specifically that this does not apply to our regular customers! But this was necessary in order to be able to pay the high costs of rent, staff, and store setup, and that's not even counting the cost of procuring goods. The city is full of display windows with signs saying “Mid-Season Sale,” “Cruise Sale,” “After-Season Sale,” and so on. Online everything is always on sale somewhere.
As a result, the consumer has the feeling that regular prices are a rip-off. We only ever had lots of customers at sale time. And even when prices were reduced by 50% people were beginning to haggle at the checkout: “I’ll take all three if you give me a discount of 70%.” Nowadays, you can’t attract customers with discounts of 20% anymore. Then the customers, who spend three hours deciding what they want, try out innumerable pieces of clothing, and find everything great, still only buy two T-shirts with the justification: “I don’t actually need anything. My wardrobe is sooo full.” For almost the last year we have been hearing that every day. But as soon as prices are reduced they buy, even though their wardrobe is full. Above all as a result of the extremely low prices for fashion goods at the verticals, the customers have the feeling that when they buy from us at the regular price they are paying too much. The production conditions play no role in it.
The biggest problem was that it was becoming more and more difficult to sell goods at the regular price.
And none of that was the case earlier?
Now and again, of course, but those were absolute exceptions. After all, there was no “fast fashion,” no online shopping allowing you to compare pricing internationally, and above all, there were specified periods in which discount prices were allowed. Fashion articles were mostly made in Europe and not in low-wage countries such as Bangladesh and so on. And when it was produced there, cheap goods like that were offered by discounters such as Kik, etc., and were rather unattractive.
...but it is constantly said that, thanks to the Internet, consumers nowadays are optimally informed about everything and ought to be aware about background issues like that, also...
Of course, but that doesnʼt change the fact that consumers buy where things are cheapest. Information such as that fast fashion makes apparel under extremely unfair conditions and that the people who make their clothing can hardly survive on the wages they are paid doesn’t change anything. The same is true for food. Appreciation of quality no longer exists in all areas of life. Take the music industry. Everybody wants everything “for free.”
The city is full of display windows with signs saying “Mid-Season Sale,” “Cruise Sale,” “After-Season Sale,” and so on. Online everything is always on sale somewhere.
Was there a specific reason all the same that led you to make your decision?
There was no direct cause which caused me to decide to shut the store. But about three years ago the frustration gradually began to get worse. On the one hand, the workload, the social responsibility, the pressure. On the other hand, the declining number of customers, and on top of that the haggling over the prices by the customers, the constant questioning about whether it couldn’t be even cheaper, whether they could have one discount on top of another. Recently, I was able to maintain profits by systematically reducing my order volumes and through savings such as staff reductions, etc., but the effort involved was ten times more than ten years ago. In the past I was able to sell 80% of my goods at the regular price, but these days it is just barely 50%, if I am lucky. The rest went over the counter at wholesale price or sometimes even under wholesale price. That means that, in the case of half the goods, our services were unpaid.
In other words, in the end the customer is only interested in the price?
Yes, of course. You can have a great range of goods, offer great service or decorate the store in an exceptional way–if people can get the piece or something similar somewhere else, they go there. And somehow that’s quite understandable. None of that got any easier after the law on discounts was abolished in Germany and there was no regulation anymore, so that everyone can reduce prices when and by as much as they want. And because of the inventory pressure, price discounts come sooner and sooner. Of course, the labels make their own contribution to this. Order limits lead to inventory pressure.
Even when prices were reduced by 50% people were beginning to haggle at the checkout: “I’ll take all three if you give me a discount of 70%.”
Why haven’t retailers shown greater solidarity among themselves and agreed to reducing prices later?
Because some would always break ranks and reduce prices sooner because they are under greater pressure or want to attract customers. And that works not least because of the persistent “stinginess is terrific” mentality, which seems to me to be most pronounced among the Germans. Such a free-of-charge culture has come into existence there. People want everything cheaper and don’t value or don’t see the value of the work involved. In my opinion this development began with the Mediamarkt “stinginess is terrific” ad and the discounter concepts of Aldi, Lidl or Ikea.
It was also possible to hear in what you said that, apart from the changed mentality of consumers, there are additional negative factors, specifically the Internet.
Yes, here you can shop around the clock, you can compare prices, there is a substantially larger selection and a resulting greater transparency because customers can see where it is cheaper and in how many colors their dream garment comes. But in my store I cannot stock all the available colors and also cannot match the prices of the major fashion retailers.
But there used to be an online Slips shop...
Yes, of course, but even there I cannot offer a garment in every color. A major problem is also that almost all labels offer their own fashions online. Our online shop did not really cover its costs, financially. Staff costs for the Web shop alone are immense. And it is no longer possible to compete with the major players in the multilabel online store sphere, anyway. The online shop was only useful to me because customers saw articles there and then came to the store for them. If I had introduced additional changes they would certainly have involved becoming more active on social media and freshening up the store itself. We would also have had to do more in the area of events–customers like an event in the store with a glass of Prosecco included. I sometimes had the feeling that we had to be an events agency. This constant “invent something new” and constantly making sure people have fun–that is not necessarily my thing.
Information such as that fast fashion makes apparel under extremely unfair conditions and that the people who make their clothing can hardly survive on the wages they are paid doesn’t change anything. [...] Everybody wants everything “for free.”
What was the reaction when you announced that you were closing?
Highly varied. When the article about me and the close-down appeared in the Süddeutsche Zeitung I read the comments on the Facebook page of the Munich edition of the SZ. Ninety percent of them were negative. People said that I myself or the retail trade itself were to blame for the wretched state of affairs, the things were over-priced, we were shutting ourselves off from online, staff were unfriendly and arrogant–and such statements come, among others, from people who have never been in the store or spoken with me and who know nothing at all about the situation. Often, things were just parroted off without the person having any idea–and on social media they give vent to it. But there were also very nice, moving reactions on our own pages. We had really great regular customers. Once it came out that we were closing we got letters, gifts and many really cried, but they could understand the step.
...and the reactions within the industry?
Also divided: When I announced I would be going out of business, I received support from some colleagues, who even said themselves: “I’m not interested anymore either.” But there are others who have accused me of stirring up bad feelings by saying clearly what I don’t like. But it is not my intention to say, “The fashion industry is crap.” Instead, I realized that the time was right for me to make a change that I don’t want to do what I am doing anymore, and said: “I need a change.”
A propos the fashion industry, what needs to happen to make things simpler for multibrand retailers?
On the one hand, there should be fewer goods available. An artificial scarcity would help. The wardrobes are full. People don’t need any more clothes to put on. There is too much clothing on the market and consumers are experiencing a glut. Not least due to the verticals, which copy quickly and, I must admit, often quite well, the supply of fashion goods is too large. On the other hand, more transparency in connection with production is needed, because that involves true added value. And not least, the goods simply still come out at the wrong time. I simply didn’t want any down jackets delivered in June. That doesn’t make sense. But nothing is changing in that regard: If you stroll along Maximilianstraße in August there are fur coats hanging in every display window and the winter season with Web shops sometimes begins in May.
In my opinion this development began with the Mediamarkt “stinginess is terrific” ad and the discounter concepts of Aldi, Lidl or Ikea.
Do you see any chance for multibrand retail in general?
I think that it is getting more and more difficult for larger multibrand stores. I have more confidence in highly individualized smaller stores. There will certainly be greater demand for fair trade practices. They really do exist; customers who reject the insipid sameness of the inner cities and want to have access to fashion in a way that shows respect for the people who produce it. I am certain that there will again be a trend against globalization and the bland sameness in stores.
Currently there is a lot of talk about stores being open on Sundays and the law on shop opening hours. Do you see that as a way to increase sales?
I am not so sure about that. That would only remove some distortion from sales revenues. And on Sundays, customers would probably just be getting fashion advice without actually making a purchase.
What would you suggest to young people, who want to open a fashion store today?
Many people go about it in a very naive way and I would suggest to them that they think it over very carefully. If you have the courage to, I would stock Fairtrade labels and look for a spacious retail space with a loft atmosphere where you can really showcase yourself. It doesn't have to be an absolutely prime location. It is almost more important to have enough parking–and that the shop has a lot of variety to offer, with a good range that is well presented.
What comes now, after three decades of retail fashion?
It was always my dream to live on Ibiza. I've regularly vacationed there for over 30 years. There I enjoy the peacefulness of nature and the countryside. The plan is to open a wonderful small guesthouse there. The grand opening could take place in 2019. Even if things don't go well, as early as 2018(laughs) ...because actually I want to take some time off first and live on the island.
I think that it is getting more and more difficult for larger multibrand stores. I have more confidence in highly individualized smaller stores. There will certainly be greater demand for fair trade practices. [...] I am certain that there will again be a trend against globalization and the bland sameness in stores.
Why are you trading fashion in for the tourist industry?
Because in this industry my work will be appreciated again, it is not similar to online, it is individual and there are no sales. A place where guests really feel right at home, can surround themselves with beautiful things and have time to enjoy nature. Ultimately, I am still selling something as I have done in the past, just not fashion anymore, but instead time, valuable time, because time is the most valuable thing we have… a little like what the philosopher Richard David Precht says: Less stuff, more time.
Find out more about the stars of our GERMAN ISSUE in the brand new print magazine or check the digital magazine here.