Struggling Giant Sends Warning Signal: Germany Falling Behind

Ka-de-Wa’s Struggles Reflect Germany’s Economic and Political Woes

The German luxury department store “Ka-de-Wa” in West Berlin is facing tough times. Despite appearing normal on the surface, signs of trouble are becoming increasingly apparent. Fancy films block access to most products in the design and home department on the fifth floor, and empty shelves and bare walls can be seen on the fashion floors. Even the chocolate shops on the sixth floor only accept payment by credit card, which has become a common practice due to the bankruptcy of Cigna, the Austrian real estate company that has owned the store for a decade.

Cigna’s bankruptcy stems from a combination of specific business reasons such as rapid expansion, expensive financing, and mismanagement, against the backdrop of a slump in the commercial real estate market. It symbolizes Germany’s dismal economic situation these days. Despite Chancellor Olaf Schulz’s promises about a year ago, the latest data published this month show that Germany contracted by 0.5% in 2023. The far-right “Alternative to Germany” party and the “Sarah Wagenknecht Alliance”, a far-left party that split from “Di Linka”, together win 25% of the vote according to recent polls. This year’s regional elections and European Parliament elections may translate public unrest as radical political change due to these economic struggles.

However, there is hope for “Ka-de-Wa”. According to its manager of business activity, there is a future for it if rent becomes normal again. The store is hardly sold through online trade (it only started doing so in 2020) and is struggling to survive after two Corona years where online trade soared and non-German economies have already recovered. The department store reflects not only its own troubles but also those of Germany – it is not yet widely sold online, making it difficult for customers outside of West Berlin to shop there.

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