The coronavirus poses enormous challenges for retail companies. Tens of thousands of shops have been closed for days. If this situation continues for a longer period of time, the existence of many traders is at stake. The shopfitting industry is also affected by this development, as new construction and conversion projects in retail are often put on hold for the time being.
“At the moment, we are all definitely in an exceptional situation. Every day we have to react because decisions made by retailers the day before, such as continuing conversions on the floor space, may no longer be valid the next day. The statement by Klaus Hummel, managing director of Konrad Knoblauch GmbH from Marktdorf, is characteristic of the situation that most shopfitting companies are currently facing.
While supermarkets are currently experiencing an unprecedented onslaught of sometimes panic-stricken customers, other sectors, above all fashion and lifestyle retailers, are having to contend with the massive effects of store closures. “Some retailers who have to close their stores now may not be able to rebuild in the near future,” says Carsten Schemberg, Managing Director of Theodor Schemberg GmbH, cautiously assessing the current situation. Some dealers who have just initiated a business conversion are breaking off or are pushing for the installation work to be completed during the closing period. But there may also be other reasons for stopping ongoing projects: “It ranges from quarantine cases in construction management to travel problems, because fitters simply don’t know whether they are coming to the construction site or back again. Especially when we are active in neighbouring countries,” is Klaus Hummel’s experience.
“We reassess the situation every day.” Carsten Schemberg, Theodor Schemberg Einrichtungen GmbH
The shopfitting industry is currently confronted with the situation that both retailers and suppliers are suspending current contracts and individual customers are stopping payments for services that have already been provided. At the beginning of the year, customers often negotiate volumes with the customers, which are then processed by the shopfitters in the following months, reports Frank Wessels from Tenbrink Einrichtungen in Stadtlohn: “The more that is purchased, the greater the bonus”.
Wessels considers it a great advantage that Tenbrink processes all customer orders just-in-time. This gives the customers some breathing space if they do not want or are only able to call up the service immediately, but at a later date. If material has already been ordered for production, one would of course have to talk about the costs. “We can currently hold-on most orders and only process them when our customers need the finished parts.
China delivers again
Münch+Münch GmbH is confident that it can overcome the crisis in the industry. “The overall order situation is still good for us and we will keep the business running as long as we can somehow”, says managing director Konrad Münch. “As a rule, we have framework agreements and can pre-produce shop fittings for our customers which are not immediately delivered to the POS.” The shopfitting company from Frankfurt has its main pillar in the luxury sector, where the situation is less critical than in the fashion trade. Also the flow of goods from the pre-suppliers does not yet cause the entrepreneur any worries: “We will soon even receive another container from China. However, suppliers from Eastern Europe are faltering, mainly due to the processing at the borders.
“The declared aim is to maintain production.” Konrad Münch, Münch+Münch GmbH
The planning offices, which handle the complete processing with on-site assembly for their retail customers, are also dependent on sub-suppliers. Kinzel Architecture from Schermbeck, which mainly works for customers from the food retail sector, is currently feeling the other side of the corona crisis. Their customers demand strict adherence to deadlines in boom times. “On Monday, we sent four fitters abroad to a grocery store that had commissioned us to plan a new assortment department. Because of the current waiting time at the border and the costs involved, we wanted to postpone this appointment, but the retailer insisted on keeping to the deadline,” Valentina Kinzel explains. Because no construction meetings can take place at the moment, things are usually slower than usual at the construction sites at the moment.
Kunze Ladenbau in Elmshorn focuses on the fashion trade and counts well-known companies like L+T in Osnabrück and CJ Schmidt among its customers. “The majority of our customers have postponed their plans for this year. They now want to wait and see what happens,” says managing director Dirk Kunze. Many of the plans that would have been carried out in summer are now on ice. “We were very fortunate that we were able to just finish most of our assembly work. Two weeks ago we were still fighting at all the construction sites because the dealers wanted to get in with their new goods.” On the other hand, it would also have advantages if it were possible to assemble on site during the period of shop closures. Then the conversion can be accelerated and everything is ready when the store reopens.
“At the moment we definitely have an exceptional situation. “Klaus Hummel, Konrad Knoblauch GmbH
In view of the threatened loss of sales over a longer period of time, all shopfitters are going through emergency scenarios in case the current situation can no longer be maintained. “Depending on how our customers behave in the coming weeks, we will logically have to consider short-time working. At the moment, the instruments of overtime reduction and residual leave are still helping us,” says Konrad Münch.
Tenbrink has already made provisions for this eventuality and has applied for short-time work benefits so that they can be quickly put in place when they are actually needed. “This is all arranged and aims to keep us in a position to act and not have to start when the problems are there,” says Wessels. Kunze Ladenbau is also considering prophylactically registering short-time work benefits, especially since it does not yet seem certain how the funds will be distributed if necessary.
The German Shopfitting Association offers its members support on all issues relating to the Corona crisis. Angela Krause, the head of the dlv office in Würzburg, sees the main task of the association at present above all in maintaining contact with the members and in picking up the current mood. Required information is bundled and made available to the member companies with further information. “We are particularly concerned that the sectors to which shopfitting has so far been able to switch, such as trade fair construction, catering and the hotel industry, are also struggling with problems at the moment,” says Krause.
Nobody can say at present how long the standstill ordered by the government will last. If the closures are extended by another four weeks until the end of May, then many retailers will suffer, according to the trade associations.
Guest contribution Winfried Lambertz, editor-in-chief of stores & shops, www.stores-shops.de