Future in stores - The Forecast 2022 - Magazine | Monocle

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Thailand’s largest retailer, Central Group, opened its first department store in Bangkok 65 years ago. Today it owns some 60 department stores and builds shopping malls, offices, homes and hotels all over the country. The family-run business has also been buying high-end European department stores and returning them to their former glory.

Tos Chirathivat, ceo and grandson of Central’s founder, took the company into Europe in 2011 with the acquisition of La Rinascente in Italy. The past decade has seen Denmark’s Illum added to its portfolio, along with majority stakes in Germany’s Kaufhaus des Westens (KaDeWe) and Switzerland’s Globus. All are luxury retailers that are more than 100 years old and in need of significant investment. 

With Asia beginning to open up, Chirathivat is planning a European tour, starting with oma’s transformation of KaDeWe in Berlin. It could turn into a shopping trip as well. Central’s headline-grabbing acquisitions have been on hold over the past 18 months but Chirathivat has deep pockets. The group listed its retail arm on the Bangkok stock exchange just before the pandemic and the proceeds remain largely unspent. Will London’s Selfridges be next after its owners put it up for sale for a rumoured £4bn (€4.7bn)? Chirathivat is tight-lipped but a bid wouldn’t surprise anyone in the industry.


Why do department stores have a future?
It goes back to the old days when the department store played an important role as a social place. But it doesn’t work if you have 10 of them in one place. A city only needs one or two.

Why has it fallen to you to save the department store in Europe? 
Because it’s not easy and no one wants to do it. People are more into investing; they just want to buy and sell, make money and go. But we are still traditional. We want to buy a shop and create something unique for a city. We’ll be there long-term and we almost never sell anything [in our portfolio]. It can take years to finish one project, especially in Europe. In the case of Rome, it took almost 10 years. Then, after that, you need to operate on a daily basis. I don’t see many people or many companies who are willing to do that any more.

How would you rate your decade in Europe?
The Italian business is excellent; we’re very pleased. Germany is the second big project. We’ve been there for five years now but we’re not finished with our redevelopment. KaDeWe in Berlin will be completed by the end of this year or early next. It’s one of the largest stores in Europe, comparable to Harrods, so that’s a major step and our brand partners are very happy. But Germany will take us another two years. We are starting anew in Switzerland. So far, so good.

“No one wants to go and see the same thing everywhere in the world, right? You want to see what’s different”

Why the focus on Europe?
Retail is not fun to operate; it’s very hard work, day in, day out, and you need to be close to your community. Very few retail companies are successfully operating across many countries. It’s almost impossible to manage if you are spread out everywhere in the world. So we picked Italy; the other countries just followed. Our focus remains in Europe because there’s no way we can go to the US or to Japan to do the same thing. Thailand, Vietnam and Europe – that’s enough.

Do the European luxury brands still want to be in a department store?
When we went into Europe, the brands questioned our ability but we’ve proven that we know how to do this. The brands need to trust that you are able to deliver the space, the ambience and the environment they want to be in. And you need to be able to maintain it and run it properly. Not many people can do that so there are not many people whom the brands trust. You need to really work with them.

What effect has the coronavirus pandemic had on these relationships?
Many of our stores [in Europe] have been closed for almost a year but inside the renovation went on.

Our partners, our brands, they continued to invest and so it’s really exciting now that all our locations are open. The stores are brand new and fresh, and all the brands are there. We did not stop in the past one-and-a-half years and you’ll see the difference, like in [KaDeWe] Berlin – a new floor and millions in investment by us and by our partners.

Does fashion have a place in department stores or is the future in food and drink?
Definitely. We believe in the future of luxury retail because that’s human nature. People aspire to have nice products. At the same time, luxury brands are doing a great job in making their products more accessible. That’s where we come in and we join with the brands. Consumers can either go to their store or they come to our store, where all the brands are together and it’s more accessible. There’s no security on the door; you can just come in for a look and then buy a cup of coffee.

Where does e-commerce fit in?
We have a fantastic physical platform and we are now building the digital platform. Connecting the two will make it really meaningful and it’s already proven quite successful for us in Thailand. We have 18 million members in our loyalty programme and 70,000 employees working in our stores, so we are designing tools for them to interact with each other. Consumers love to have a connection with staff and our top customers today have their own personal shopper who they can contact in their local store; they know the staff, they know the managers. 

What’s next? KaDeWe Asia?
No, we don’t want to take any project international. You have to connect with local people and the local food, local arts, local culture. No one wants to go and see the same thing everywhere in the world, right? You want to see what’s different.

Are you ready for the Thai borders to reopen? 
We’ve been waiting for this. Thailand is a country that depends on tourism quite a lot – as a percentage of the economy it may be one of the highest in the world. It’s crucial that tourism is coming back. 

How much does Central depend on tourism?
Our domestic demand is about 80 per cent of what it used to be, so we’re 20 per cent down from before the pandemic. Tourists directly contribute about 10 per cent to our business in Thailand and the other 10 per cent comes from domestic consumers who depend on tourism. That should pick up when the situation improves and it’s getting better every day. In our stores in Europe, domestic demand is now the same or exceeding pre-coronavirus levels.

Will you reach pre-pandemic levels in 2022?
Frankly, no. But, again, it all depends on the tourism number. Will Thailand get 50 per cent of the normal tourism arrivals that we used to get next year? I don’t think so. But hopefully we should be there in about two or three years. 

Do you think Asia will open again in 2022?
A lot depends on the decisions of China and Japan, and how they want to deal with it. Asians are much more cautious and conservative than our Western counterparts so the return will be slow. 

Do you have a favourite department store?
Rinascente in Milan and the one in Rome. Of all our stores, I love those the most. But Le Bon Marché in Paris is really beautiful. And Selfridges has done a very good job with its energy and excitement.

What can we expect to see happening in Asia as borders reopen? We ask the market leaders.



Who: Hiroshi Yamanaka
Role: President
Company: Maruni Wood Industry Inc

“Coronavirus has had a huge effect on our lives. Although the boundaries between office furniture and high-quality home furniture have been blurry for some years, we have become far more aware of them. Maruni is looking forward to returning to Salone del Mobile in 2022 and showcasing our new products and concepts to people from all over the world. We are also thinking about how to address new challenges in terms of product development and sustainability ahead of our centennial in 2028.”

Transport & logistics

Who: Noni Purnomo
Role: President
Company: Bluebird

“Indonesia’s economy is forecast to grow by at least 4.5 per cent in 2022 and this will be fuelled by a mix of infrastructure investment and recovery from the pandemic. With vaccination rates already above 60 per cent in major cities, we will have the confidence to reopen our borders, so tourism-related industries will start to recover. We believe that 2022 will be much better than 2021. We are hiring more taxi drivers and doing our bit to reduce unemployment in Indonesia. On the logistics side, delivery costs in Indonesia are still very high compared to neighbouring countries such as Malaysia, Singapore and Japan, so this offers plenty of opportunities.”

Property development
The Philippines

Who: Fernando Zóbel de Ayala
Role: CEO
Company: Ayala Corporation

“The pandemic triggered a profound realisation that our ecosystems are fragile and that collective action can help to solve complex problems. Accelerating digital technologies brought greater connectivity, with several fintech and healthtech solutions empowering people to address previously underserved needs. We will be moving aggressively into both. Also, there are unprecedented levels of public-private co-operation to tackle climate change and inequality. Heading into 2022, I believe that Asia will join other parts of the world in its economic recovery.”

Food & drink

Who: Wee Teng Wen
Role: Managing partner
Company: The Lo & Behold Group

“Businesses and guests are eager to ring in 2022 after a very challenging and unexpected 2021 that saw Singapore tightening restrictions. At The Lo & Behold Group, we’ve made observations that have shaped our plans for our venues. People have reconnected with their roots and local cultures in new ways after spending so much time being tourists in their own city. I expect to see a stronger activation of the suburbs born of the decentralisation of work. And since people have spent so much time at home, conventional rhythms have blurred – perhaps tastes for dining at odd hours and daytime drinking are here to stay. But more than anything, we’ve seen the power of hospitality venues to lift people’s spirits and bring them together.”


Who: Gen Yakasaki
Role: Senior operating officer
Company: Beams

“We expect 2022 to be a big year for us in the global market. We’ll be returning to Paris in January; we plan to showcase six of our in-house brands including Beams Boy, Beams Japan and Beams F in addition to Beams Plus, which has always been the main draw. In Asia we’re looking at increasing our retail presence in Taiwan and also opening permanent shops in China, where we have had more than 10 pop-ups. We are looking for strong growth outside Japan.”


Who: Ronald Akili
Role: CEO and co-founder
Company: Potato Head Family

“Bali has begun its long-awaited reopening to foreigners and I believe that ‘regenerative hospitality’ is the only way forward for the next generation of adventure-seekers. It’s not a fad; it’s a new kind of tourism – a way of being in and experiencing a destination that deeply enriches both it and the visitor. It’s a commitment to inspire and model change for the entire hospitality industry. After a decade of hard work we’ve realised that hospitality and tourism can be done in a better way. There is virtually no waste at Potato Head; just 3 per cent ends up in landfill, with the goal of zero by 2022. For the future, I have three things to focus on: helping the people in Bali; our philosophy that sustainability can be beautiful; and driving this new standard for hospitality. We have a chance to make a clean start and do it the right way.”

South Korea

Who: Suh Kyung-bae
Role: Chairman
Company: Amore Pacific

“As South Korea’s leading cosmetics company, we are always attentive to the fast changes taking place in our industry. We expect to see robust competition between cosmetics brands in Asia’s beauty market as we enter a new era in 2022, driven by a burgeoning number of digital channels, increased consumer demand for skincare products and services, expansion of the young luxury market and the rapid growth of the beauty market in China. South Korea’s cosmetic industry is well positioned to take on a new leadership role in the global beauty marketplace. It’s brimming with innovative products and top-tier research and production facilities, and has demonstrated solid growth of a diverse range of new brands. Following France and the US, South Korea’s industry recorded more than €5.8bn in exports last year alone.”


Who: Zhuo Tan
Role: Event director
Company: Design Shanghai

“We have reasons to be optimistic, both about the economy and the show industry. China still has a zero-coronavirus policy but there’s speculation that this might be relaxed a bit next year. By then the inoculation rate will have reached 80 per cent and major events will have taken place. The design industry in China has taken 2021 as an opportunity to reflect on the role of living spaces and the connection between people and nature. Sustainable design was a feature of the Beijing show this year and it will remain the key theme. We have three shows in the pipeline for 2022, in Shanghai, Beijing and Shenzhen. Next year won’t be easy but it should be better than this year.” 

Hong Kong

Who: Toby Smith
Role: Deputy chairman
Company: Swire Hotels

“We’re looking forward to a more positive 2022 and 2023. There’s undoubtedly pent-up demand for business and leisure travel. How quickly it returns will depend on how and when the frictions around flying can be removed. Hotels on the Chinese mainland are benefitting from the large domestic market but hotels in Hong Kong will continue to suffer until quarantine-free travel resumes. Our main focus will be on the expansion of our two brands in Asia-Pacific. With five new hotels in the pipeline, much of my time will be spent travelling in the region meeting developers and looking at site opportunities.”


Who: Tran Thi Hoai Anh
Role: Founder and CEO
Company: GlobalLink Co

“While many businesses in Vietnam may still be in doubt, luxury fashion is doing relatively well. Many wealthy shoppers were not able to consume much during four months of lockdown. Now that they are out, I expect that they will start spending again. Clients here always prefer daily wear to evening wear and go for smart, elegant and creative styles from well-established brands. I see them focusing more on quality and beauty in the future, especially when it comes to their home, health and hobbies. In 2022 we will build a new Runway flagship shop in the best location in town and two new monobrand stores. I don’t think we will be able to travel to Europe for the fashion shows before autumn/winter 2022, so the keys to success for luxury retailers in Vietnam will be the experience of their buyers and strong customer relationships.”


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