Jelmoli in Zurich to close

The real estate company SPS is pulling the plug on the Jelmoli department stores in Zurich. Instead, there will be smaller shops and offices. This is in line with a trend: shopping streets are becoming luxury destinations, with long-established institutions disappearing.

The real estate company Swiss Prime Site (SPS) has spoken with 50 interested parties, but no-one wanted to continue running the Jelmoli department stores in Zurich in their current form. On Monday morning, SPS therefore announced the end, and this was also confirmed by emails sent to registered customers on Monday. The flagship store and the branches at Zurich Airport will be closed by the end of 2024. Around 850 employees of Jelmoli and brands that have rented space in the department stores are affected by the decision.

The building, not far from Zurich's Bahnhofstrasse, will then be converted at a cost of CHF 100 million. Retail space is still planned for the ground floor, basement and possibly the first floor. But there will no longer be a single operator. "There could also be 30 different companies, each with their own branches," says SPS spokesman Mladen Tomic. SPS is ready to talk if an interested party wants to take over a larger area. But it does not look like that will happen.

"A department store like Jelmoli, with an area of 24,000 square metres, is simply no longer in keeping with the times," says Mladen Tomic. Shopping is much more targeted nowadays, and the Corona crisis has simply accelerated this development. Even the location of the Globus luxury department store on the Bahnhofstrasse has to manage with only half the floor space.

An institution is to disappear
The business of Jelmoli, which offers luxury brands on the one hand, but also more affordable brands within a single location, has been sluggish lately. "We have taken many initiatives," says Mladen Tomic. "We have always renewed the various selling areas, opened new brand worlds, built an additional online shop and brought a lot of gastronomy in-house." It was hoped that synergies would be created with the offshoots at the airport, but this wasn't enough.

The real estate company SPS has decided to close Jelmoli at the end of 2024               Gaetan Bally  

Mladen Tomic does not doubt that SPS will find tenants for the office space, even if home offices have reduced the demand. "Surveys among our tenants show that central locations are still very much in demand." In addition, there is almost no large contiguous office space left in the city centre of Zurich, which SPS can now offer after the conversion.

Nevertheless, the closure of Jelmoli is a "massive bloodletting for the city of Zurich", says Milan Prenosil, president of the City Association. "The news shocked me." But he has no doubt that SPS will find new tenants for the shop and office space. "This is a prime location," he says. One has to be honest: "The time of department stores is over".

Too expensive even for Apple
With Jelmoli, another decades-old institution is disappearing. At the beginning of 2020, the Manor department store on the Bahnhofstrasse was also affected when it could no longer pay the higher rents and was kicked out by Swiss Life. The insurance company is now converting the building: there will be more shops with smaller spaces in the future, with offices on the upper floors.

With the future use, Swiss Life should one day collect rental income of over CHF 20 million per year, according to an expert on the market. Luxury shops in particular will be able to afford the rents; but there won't be much left of a shopping place for the masses. According to reports, the space is even too expensive for the US technology giant Apple, which actually wanted to return to the main shopping mile from its exile on Rennweg, a side street of Bahnhofstrasse.