Manor department store is making a comeback to Zurich's city center, occupying three floors totaling 13,000 square meters in the former Jelmoli building, which, like Jelmoli itself, is owned by real estate company Swiss Prime Site (SPS). The announcement was made by both companies on Tuesday morning.

This news is already causing a stir amidst the normal hustle of Zurich's city center, particularly during the otherwise quiet summer season.

Clash with Swiss Life

Recall that a few years ago, Swiss Life forced Manor out of its former location on Bahnhofstrasse. They couldn't agree on the rent.

The tone was sharp: «It is not Swiss Life's responsibility to subsidize a corporation with the money of our insured by foregoing market-rate rent,» wrote Swiss Life in 2019.

Uncertain Future

SPS announced a year ago that it would cease its department store operations and close Jelmoli as a result.

The future of the third historic department store, Globus, is uncertain following the collapse of René Benko's Signa Group.

Until now, it seemed quite likely that Bahnhofstrasse could be without any department stores in the future, apart from Coop City.

A Matter of Figures

Due to the events surrounding Manor/Swiss Life and SPS/Jelmoli as well as Signa/Benko, it was almost a foregone conclusion at the financial center that apparently department stores couldn't generate enough returns to support the high property valuations.

Now everything is different – a department store remains in the Jelmoli building.

Manor Better Positioned Than Jelmoli

From Manor's perspective, returning to Zurich's city center has been a long-cherished desire.

With 59 department stores, 27 food supermarkets, 23 restaurants, and around 7,500 employees, the company owned by the Geneva-based family business Maus Frères (President: Didier Maus) has the critical mass to pay a rent in Zurich that also satisfies the property owners.

Unlike the comparatively small Jelmoli on an international scale, Manor has significant synergies in purchasing and administration. In addition, within the Maus Frères group, there are own brands like Lacoste, Gant, and Kooples, as well as textile production facilities.

Presumably Rent-Preserving

The battle with Swiss Life, which the former Manor management had fought quite bitterly, seems forgotten. With Roland Armbruster, who has been CEO at Manor since 2023, it seems they are better able to reach agreements on real estate than with his predecessors.

From the perspective of the property owners, namely SPS, it seems they have succeeded in negotiating a rent with Manor that justifies the financial valuation of the Bahnhofstrasse building.

Room for Diversifying the Tenant Base

With the basement, ground, and first floors, Manor certainly occupies the most expensive floors in the building. Nevertheless, the 13,000 square meter area is only about half the size of the current Jelmoli department store.

Manor as a major tenant reduces the complexity in managing the building for SPS. At the same time, new opportunities arise for diversifying the tenant base.

Elegant Withdrawal of SPS From Retail

For SPS, the closure of Jelmoli combined with the Manor deal represents an elegant withdrawal from the challenging retail business, which has always been foreign to the real estate company.

And without leaving the impression on the public that SPS has destroyed Zurich's department store scene. It may well be that a bit of local patriotism also favored the deal at SPS.

Accordingly, René Zahnd, CEO of Swiss Prime Site, comments on the deal as follows: «Our main priority from the outset has been to turn the Jelmoli building into a unique destination and open meeting place. The planned move of department store group Manor and its long-standing tradition will breathe new life into the Jelmoli building for Zurich and its inhabitants – radiating far beyond the city limits.»