Silvio Kirchmair, CEO of umdasch The Store Makers Management GmbH and Member of the ACROSS Advisory Board. Credit: umdasch
Retail | Ticker

“There will also be winners and new business models will emerge”

The world and the retail sector are literally gasping for breath. Silvio Kirchmair, CEO of umdasch The Store Makers and Member of the ACROSS Advisory Board, talks about the situation at umdasch and how things could continue in the retail sector.

ACROSS: What effects does the corona effect have for umdasch The Store Makers in operational terms? 

SILVIO KIRCHMAIR:Of course, the Corona pandemic will have a considerable impact on us as well. Neither the closed stores, nor those that keep the basic supply of goods running, have the money or time for renovations at the moment. We have prepared for three scenarios: A decrease of 30 %, of 15 % or a stable development compared to 2019. All three possible developments are based on the assumption that the restrictions on public life will be gradually eased from May onwards and differ in the expected economic upturn. 

ACROSS: How does umdasch support grocery stores, drugstores, pharmacies, banks and all others who are currently maintaining the supply with their hygiene measures? 

KIRCHMAIR:umdasch The Store Makers are still fully capable of acting, we still manufacture at all our production sites. We support our customers wherever possible. Be it for individual concepts and solutions for virus protection, the continued support of Digital Signage screens even in closed stores and hygiene stations for protective masks and disinfectants to reduce the risk of infection in the stores. 

umdasch supports its customers, for example with hygiene stations for protective masks and disinfectants to reduce the risk of infection in the stores. Credit: umdasch

ACROSS: How do you think “Social Distancing” will influence people’s buying habits after the crisis? 

KIRCHMAIR:I think that life will be different after Corona. Greeting rituals such as shaking hands or hugging will be reduced, we will all be more distanced. The world may become a bit more “Scandinavian” and less “Southern”. I also fear that the willingness to buy will only slowly recover for months to come. Long-distance travel or spontaneous shopping weekends outside one’s own country will no longer be the order of the day. Business travel budgets will also decline and video conferencing will be used much more. I hope that we will not be forced to wear mouthguards permanently and that our fundamental freedoms will be restricted permanently. Regional purchasing will become more important and business models based on organizing production in Asia and sales in Europe or the United States will tend to become less important. It remains to be seen whether this will be advantageous for a small economy that depends on exports, such as the Austrian economy. 

ACROSS: Many retailers have to keep their shops closed and depend on loans to cover running costs. Do you think it makes sense to invest right now? 

KIRCHMAIR:You have to keep in mind that companies do not slide into insolvency because they are making losses, but because they are no longer liquid. Insolvency is actually the result of a loss of confidence on the part of lenders and/or owners. At present, it is more difficult to obtain additional liquidity. Companies that are already ailing are hardly able to obtain new loans without state guarantees. Even though countercyclical behaviour has often led to success in the past, this approach can only be recommended to very strong companies with stable business models. We must remember that we in Europe and the USA have not yet reached the peak of the pandemic and cannot yet assess the consequences. It is therefore advisable to keep the “powder” dry. However, in addition to numerous losers, there will also be winners and new business models will emerge. 

ACROSS: What is your personal appeal to your fellow human beings these days? 

KIRCHMAIR:The Corona pandemic is a considerable break in all our lives and a caesura of a significance that we can only gauge in retrospect. The world will continue to turn, so fundamental optimism is appropriate even in these difficult times. 

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