Death by brands

What has become of the once charismatic kiez, Mitte's Alte and Neue Schönhauser Straße? Falling victim to rising rents, many of the liveliest independent boutiques have been replaced by chain stores. A few fight on, but is the end coming?

Monsieur Vuong
Photo by Veronica Jonsson

Mitte’s indie boutique row, Alte and Neue Schönhauser Straße, has become a charmless corridor of big chains. Has the once-vibrant district lost its soul?

Walking up Alte Schönhauser and Neue Schönhauser Straße from Hackescher Markt 15 years ago, you could easily lose an afternoon wandering in and out of the GDR blocks and run-down Altbau buildings where dozens of independent, local entrepreneurs had set up shop.

Chantal Frohnhoefer, who has owned the coffee accessory shop Macchina-Caffe (Alte Schönhauser 26) since 1998, remembers: “Back then, we had a bit of everything. We had a cookbook store, an upholsterer shop, a shop where you could get your TV fixed. We used to have clothing shops before too, but those were not owned by big brands but individual people who went to fashion fairs and brought back clothes we hadn’t seen before. They had ideas!”

You could enjoy a delicious panini over an oversized Milchkaffee at Café Hauser, that tiny coffee shop next door, and pick up a handful of fresh daisies at Tausendschön a few metres further down the street, not so much a flower shop as a local institution.

It’s 2014 and the boutiques have been decimated. Gone is the panini café. Gone is the tiny store where Frohnhoefer used to find her favourite recipe books. Tausendschön, the latest casualty, shuttered last year.

What was once a charismatic Kiez has become a homogenous corridor of big-name labels and Nordic fast-fashion giants from Finnish Marimekko to Swedish H&M, the latter of which owns five stores in a 500m stretch: H&M, Monki, COS, Weekday and & Other Stories. In the last few months, two more international brands have opened on Neue Schönhauser (Karl Lagerfeld and The Kooples) and three more are under construction (Ikks, Sisley and Desigual).

Tausendschön’s storefront now belongs to a store that sells the same puffy coat in different colours. Art and design bookshop Pro QM has long since moved to Almstadtstraße, replaced on Alte Schönhauser by Vans. One of the few non-fashion holdouts from the early days, is the insanely popular Vietnamese restaurant Monsieur Vuong.

What happened? The explanation is simple and, by now, all too familiar: rising rents.

“Obviously, they can afford it.”

Daniel (name changed) opened his clothing store on Alte Schönhauser just four years ago. Today, he’s heavy-heartedly tacking up red “closing sale” stickers on his storefront. When he first signed the contract for the space, the rent was already a 130 percent increase from the previous tenant, an independent home furnishing store. With the latest contract it’s slated to go up by one-third, and Daniel can’t bear the cost any longer. The space is now going to a European label that competes on the same playing field as Zara and Topshop.

“I personally spoke with the label’s expansion manager, and he said himself the new rent is really expensive,” said Daniel. “Obviously, they can afford it. If they don’t do enough business or only break even it doesn’t hurt them as much in the end.”

While the city of Berlin has in recent years made some effort to curb exorbitant residential rent increases, there are no such protections in place for commercial tenants. Five years ago, monthly rent for an empty shop space on Neue Schönhauser was around €60 per sqm plus 19 percent VAT; now it’s nearly €120.

As local shop owners drop out, the European chains circle like vultures, eager to become part of this “image location”, as Daniel calls it. “Berlin is famous for fashion and Mitte has a reputation in the scene. The big brand names want to be seen there for that reason.”

A real estate company called and said, ‘Kick out your tenants, we’re going to get you better ones.’

And they’re willing to pay any price. “A real estate company called every building owner up to Steinstraße and said, ‘Kick out your commercial tenants, we’re going to get you better ones,’” says Kurt von Hammerstein, owner of the Hundt Hammer Stein bookstore at Alte Schönhauser 23/24. “They do the contracts on lease and they just say, ‘We’ve got a huge list of companies who want to get in here, so if you kick yours out you can increase rents by 100 percent’ or whatever. I was a bit worried, but I heard that my landlady said, ‘Please don’t call me again’ and hung up.”

Three years ago, Von Hammerstein renewed his contract with a 55 percent rent increase. But the business owner calls it “very fair” in comparison to word of mouth around the block.

Von Hammerstein’s basement shop is an anomaly on the street: he admits that he is probably one of the only ones who has benefited from a few more big fish in the area. “We are actually making good progress, but we are different because we don’t have anything to do with this whole fashion circus,” he said. “But it would still be nicer if the street was more individualistic. It’s all fashion, shoes and hairdressers.”

Survival strategies

There are still a few Davids struggling against the fashion Goliath, like East Berlin, an independent streetwear store that opened at Alte Schönhauser 33 in 2002. The boutique was famed as an indie Berlin label and sold exclusively its own clothes, but doing so was expensive and a lot of upkeep. In order to stay afloat financially, the shop began carrying larger brands, both German and, of course, Scandinavian.

They also adapted to the big brands’ techniques. “Six weeks into the season, I have to do a sale on some items because that’s what my neighbour is doing,” said Olaf Tegeler, one of East Berlin’s owners. “Last year, Weekday had their first midseason sale before Easter, although the temperature was still around 10 degrees. They were offering summer things on sale already! It’s like starting to throw away stuff.”

Other shops have survived by taking to the side streets. Renowned knitwear designer Claudia Skoda’s well-known location was Alte Schönhauser 35 for nine years, until she moved to the quieter Mulackstraße in 2012 – the landlord wanted to double the rent and she felt as though the street was becoming “less special”.

Her new rent is about the same, but the storefront is definitely a downsize – does she regret giving up the location on Alte Schönhauser? “No way,” Skoda scoffs good-naturedly. “For me, it has decayed.”

Low traffic – an image location?

In addition to rising rents, Mitte shop owners’ troubles are compounded by a decrease in business. Tegeler, whose shop sells high-quality leather jackets for up to €300 and jeans from €100 to €140, says he can no longer bank on impulse purchases from passersby.

“Sometimes I have the feeling people just run up and down the street without coming into the store. Tourists looking for something special from Berlin used to come in, but now they’ve been to five other big stores and have somehow filled up.”

When Daniel opened his store four years ago, the only competition in a similar price range was Mango and H&M, and business was booming. But in the last two years traffic has steadily dropped. Customers have gone from buying around three pieces of clothing at a time to just one and weekdays are incomparably sluggish.

“If there are 10 more stores and even fewer people, the business has to be divided between these stores,” Daniel explains. “If you don’t have a 1000sqm store like the big brands do and you don’t produce and manufacture under cheap conditions the way they do, then of course you can’t compete with them.”

But are even the big chains cutting a profit? Daniel has his doubts. “When I walk by every day, there are some stores that never have people inside,” he says. How can they be making any money? Perhaps it’s just a marketing expense for them.”

Nearby, a restaurant owner has overheard some interesting chatter between local staffers on lunch breaks. “The store manager of one of these big designer labels said people aren’t buying anything,” he explained. “The store isn’t profitable and they’ve had large losses. So probably in two to three years they will just move again.”

For the area’s long-term tenants, this is not an option. Skoda is deeply invested in Mitte, with three stores in the area, and not looking to move or expand. It’s not that she isn’t interested, but has no idea what the next ‘hotspot’ will be, or whether she would even like to be there. “I believe good things will always survive,” said Skoda. “But in Berlin, I wouldn’t move anymore. Maybe I will go to Saint-Tropez.”

Originally published in issue #126 April, 2014.