The Breuninger case: the sale of Germany's last independent premium department store stalls

A year ago, rumours of Breuninger being up for sale surfaced. Since then, things have gone quiet. What could complicate a potential deal and which investors are even possible prospects? An analysis by Dirk Boventer, partner at the management consultancy Atreus.

One year of sale intentions and no deal in sight

Breuninger is considered one of the last true beacons of premium fashion retail in Germany. With a business model that seamlessly combines a physical presence in prime city centre locations and a highly profitable online business, the company has held its own for years, even in a crisis-ridden market. In 2024, Breuninger once again achieved sales growth significantly above the industry average. This is a rarity in an environment where many competitors have had to accept declining sales or even insolvency.

Reports about the planned complete sale of the company – including all 13 premium department stores and the online business – have been circulating since mid-2024. The process is running under the project name “Keystone” and is supposedly intended to attract both strategic buyers and financial investors. According to media reports, more than 30 interested parties came forward at the beginning, including international department store chains such as Galeries Lafayette, El Corte Inglés and Central Group, but also institutional investors such as DWS, Deka and Union Investment.

However, even a year after the sales plans became public, no concrete deal is in sight. The reasons for this go deeper than mere purchase price negotiations. Although Breuninger, with an estimated enterprise value of 2.5 billion euros – of which around 1.8 billion euros is for the properties – is considered an attractive asset, it is precisely this combination of retail business and real estate ownership that makes the transaction highly complex. Many investors are only interested in one of the two segments, while the owning families are apparently set on a complete sale.

Attractiveness and complexity in one package

It is undisputed that Breuninger has created an impressive formula for success: A strong brand with over 1.3 million members in its customer loyalty programme; curated assortments in the premium and luxury segment; service excellence in store, which sets standards in the industry; and a digital share of total sales of around 60 percent – a benchmark in brick and mortar fashion retail. These strengths make Breuninger particularly interesting for buyers from the premium segment. Those who understand the premium fashion market also recognise that Breuninger can function as a platform for high-quality brands not only in Germany, but also internationally. This applies both to physical expansion into other high-end cities and to the scaling of the online business in European markets.

At the same time, potential buyers are faced with crucial questions: What is the profitability of the operative fashion business in detail? What are the equity ratio and the debt ratio? How stable are the margins in a volatile consumer environment?

The property valuation, in particular, harbours risks. Although premium city centre locations are stable in value, brick and mortar retail is under structural pressure, which can influence the long-term development of property values.

Options for the future

There are several strategic development directions for buyers:

However, these options require capital, strategic know-how and, above all, a willingness not to dilute the premium character of the company. Financial investors with a short-term focus on returns could send the wrong signals here – strategic investors from the premium fashion industry would probably be more sustainable owners.

Who could take over Breuninger?

The field of buyers is broadly divided into two groups: strategic investors from international premium retail and financial investors with an interest in retail assets.

For strategic buyers such as Galeries Lafayette or Central Group, the attraction lies in immediate market penetration in Germany and the use of the established online infrastructure. Such companies could integrate Breuninger into an international brand portfolio and realise synergy effects in purchasing, marketing and logistics.

Financial investors, on the other hand, would primarily look at the asset value of the properties and the possibility of optimising the operative business. The challenge: Breuninger is set up as an integrated system of property ownership and retail operations. Separating these units would entail considerable complexity and possibly losses in value.

Risks for buyers and brand

The biggest risks lie in the balance between increasing efficiency and maintaining brand identity. Breuninger stands for service quality, curated assortments and a shopping experience that has become rare in the industry. Interventions aimed solely at cost reduction could damage this brand essence and lead to customers migrating elsewhere.

Added to this is the uncertain market environment. Purchasing power in the premium segment is considered comparatively stable, yet consumers have become more cautious. Rising location costs, changing consumer behaviour and growing competition from expanding competitors from Asia are also putting pressure on premium retailers.

A further factor is the internal mood. The comparatively long sales process could have led to uncertainty among some of the workforce. A change of ownership will only be successful if it is accompanied by a clear strategic vision and transparent communication.

What buyers must bring

A potential buyer should not only have capital and industry knowledge, but also share the belief in the future of brick and mortar premium retail. The Breuninger stores are anchor points in city centres and contribute to the attractiveness of their locations. Future owners must recognise and expand this role, rather than reducing it to short-term return targets.

In addition, a clear decision is required as to whether the properties and retail operations should remain in one hand permanently. For the Breuninger brand, the continuation of this integrated structure would be advantageous, as it guarantees stability and control over the presentation of the brand.

Conclusion

Breuninger is one of the few examples of a successful, profitable premium department store in Germany. The combination of brick and mortar retail and a strong online business, the high level of customer loyalty and the first-class city centre locations make the company unique.

However, the lack of a sale after more than a year shows that even a premium beacon does not automatically find a buyer. High asking prices, the complexity of the integrated structure and the challenging market environment are slowing down the process.

For Breuninger to continue its success story, it needs a buyer with a long-term strategic interest who will strengthen the premium positioning, drive growth and at the same time preserve the brand’s identity. Such a step would not only be a win for the company itself, but also a signal that there is belief in the future of brick and mortar premium retail in Germany.