The Board of Directors and Executive Board of Swiss Prime Site have decided to convert the Jelmoli building on Bahnhofstrasse, Zurich and sustainably develop it further. In this context, it is planned to adapt the retail floorspace to current market demand and to add new types of use to the building.
Property to be redeveloped and repositioned
The iconic building in the centre of Zurich is set to be redeveloped over a period of two years, to start from the beginning of 2025. Once completed, around 10,000 m2 of refurbished premium retail floorspace will be available on the lower levels. It will be relevant for both existing tenants and new brands or formats. The redevelopment will ensure that the Jelmoli building remains one of the largest and most attractive shopping destinations on Zurich’s Bahnhofstrasse. Some of the floorspace on the upper levels will be converted into high-end offices and public amenities such as fitness and restaurant facilities. As René Zahnd, CEO Swiss Prime Site, explains: «By redeveloping the building, we will be adapting it to the market demand. That includes having not just an attractive mix of types of use and spaces, but also flexibility and a multi-tenant approach. Our aim is to redevelop the Jelmoli building so that it becomes a unique destination and an open meeting place in the city centre.» Swiss Prime Site plans to invest more than CHF 100 million in the redevelopment project. The reopening of the fully refurbished property is scheduled for the beginning of 2027.
Department store will be adapted to market demand and operated under new model
The decision to redevelop the building and keep it up for the future was taken after comprehensive and detailed assessment. With the boom in online retail and changes in consumer behaviour, stationary retail is increasingly being under pressure. Despite high investment by its owner, Swiss Prime Site, and tremendous efforts on the part of all employees, this structural change was clearly reflected in the profitability of the department store Jelmoli. This led Swiss Prime Site to conduct extensive market research over recent months, with the objective of transferring the department store operations externally. However, in-depth talks with numerous possible partners have not led to the intended success. Hence, Swiss Prime Site has decided to adapt the department store Jelmoli to the new market backdrop from the end of 2024. From 2027, it will be newly positioned on the market and will no longer be operated by Swiss Prime Site. As René Zahnd, CEO Swiss Prime, explains: «We are aware of the consequences of our decision. We have made it after careful consideration and are communicating it at an early stage. This will give employees time to work on possible redirection of their careers. During this period they will receive the best-possible professional guidance and support. Customers will continue to enjoy the same high standards of service when shopping. With our business partners we will enter into an intensive dialogue about future cooperation.»
Transformation process will take place under a new Jelmoli leadership
At her own request, Jelmoli CEO Nina Müller will hand over the reins at the department store in spring, or at the very latest by the end of June 2023. As a result, Jelmoli will no longer be represented on the Executive Board of Swiss Prime Site. Reto Braegger, who is currently Chief Merchandise Officer, will seamlessly take over the leadership of Jelmoli. As an executive in the retail sector for many years, he has extensive experience with transformation processes. The Board of Directors and Executive Board of Swiss Prime Site would like to thank Nina Müller for her hard work and dedication over the last three years, particularly in the challenging circumstances of the pandemic.
Non-recurring expenses of CHF 34 million in an otherwise successful year for SPS
The Jelmoli building transformation project had a negative one-off impact of around CHF 34 million on Swiss Prime Site’s income statement for the 2022 financial year. This amount consists exclusively of non-cash impairment charges and extraordinary depreciation (for fittings, furnishings, IT, inventories, etc.). Despite these non-recurring expenses, Swiss Prime Site achieved the targets set for the 2022 financial year, largely from positive letting results and growth in the Real Estate Asset Management business.
Results for 2022 to be published on 9 February 2023
Swiss Prime Site will be publishing its results for the 2022 financial year as planned on Thursday, 9 February 2023.