What are the chances for ECE people

"What do you say to the tenants, Mr. Schmitz?"

We spoke to Ulrich Schmitz for the first time exactly eight days ago. As Senior Director Center Management, he is responsible for the operational operation of all ECE centers. In figures that means: 195 shopping centers, 20,000 tenants and - in regular operation - more than four million visitors a day.

Last week Schmitz spoke of the first drop in frequency, event cancellations and low demand for fashion. In the meantime the situation has changed dramatically. Most of the centers have been switched to emergency operation, which means that only the shops for basic services are open. The fashion stores, actually the main tenants in the malls, are completely closed. Time to follow up.

TextilWirtschaft: Mr. Schmitz, what is the current situation in the ECE centers?
Ulrich Schmitz: The situation in Germany was initially a bit confusing. The first federal state to adopt specific requirements for the retail sector was Bavaria. Then came the other countries and, somewhat delayed, NRW. As of today, in all of our almost 100 centers in Germany, only those branches that are exempt from the general opening ban are open.

Are there any centers that are completely closed?
No, all centers are open with the restrictions imposed and run in partial operation with the tenants who are there for the basic supply.

What about the gastronomy?
This is also handled differently, in Schleswig-Holstein we had to stop them completely. Otherwise, there are also certain requirements here, for example, the operators must leave a distance of 1.50 meters between the tables and usually block every second table. They also have to observe reduced opening times.

How has the visitor frequency developed in the last few days before the shutdown?
The development was visibly negative, last Monday the frequencies were finally 25% below the reference value.

As part of the shutdown, retailers in their centers are now also allowed to open on Sundays from 11 a.m. to 6 p.m. Do you make use of it?
We are mainly talking about this with the grocery stores. Some of them are sure to try this out next Sunday.

In view of the total failure, the other retailers are trying to reduce their costs. One of the major cost blocks is rent. What do you say to tenants who are approaching you now?
We understand the tenants' legitimate concerns very well. The finance minister has announced an emergency fund for small and medium-sized companies, from which rents will also be paid. It is important that it now comes quickly and unbureaucratically. In addition, we are in close contact with the owners of our centers in order to find solutions for the tenants together.

What is the legal situation like from your point of view?
From a purely legal point of view, we are of the opinion that the rent payment obligation continues. Nevertheless, we naturally want to find a way that we can come out of the crisis safely together.

Do you think that a tenant will pay the April rent at all?
We don't know until the beginning of April. We are in a major crisis and must now somehow get through the next six to eight weeks together.

Some of your centers are mostly owned by the Ott family and therefore also by ECE boss Alexander Otto. Alstertal shopping center in Hamburg, Olympia shopping center in Munich, Frankencenter in Nuremberg, to name a few. Has the family signaled that they will forego rent?
The family is not the sole owner there. That makes the situation very complex.

You have just spoken for six to eight weeks yourself. Is this realistic?
When I see Ms. Merkel imposing a 30-day entry ban, I consider these six to eight weeks to be quite realistic. In addition, this morning as part of our crisis team meeting we had a video conference with a virologist who says that the number of unreported cases is five to ten times higher than the official number. That does not give rise to hope that things will return to normal very quickly.

How do you keep in touch with customers during this time?
We communicate via info screens and notices with customers who continue to come to the center for their everyday purchases. Otherwise we focus heavily on our social media channels. It is important to us that we occasionally give customers other ideas and, for example, address the topic of spring flowers.

In a letter you ask your tenants whether you should - if Corona is over - that the Sunday opening is simplified as a kind of compensation in the fourth quarter. Do you have any feedback on that?
No, I think most tenants won't have time to think about it until next week at the earliest. Our goal is to get back at least a little of the lost sales and hope for the support of politicians.

ECE also runs 40 shopping centers abroad. How is the situation there?
In almost all markets we are in, the situation is similar to that in Germany: Italy, Austria, Hungary, the Czech Republic, Slovakia, Poland and Denmark. Only in Turkey are there so far no restrictions. But there, too, the number of cases is now increasing.

Otherwise, what is the situation in the company? In view of the collapsing business, the alarm bells are sure to ring for you.
Of course we try to cut all costs, also to reduce the ancillary costs for the tenants. Longer cleaning intervals, fewer security personnel, fewer personnel at all. We have told our employees that they don't have to worry, but we also deal with the topic of short-time work. This is a completely new situation for all of us; the next four to eight weeks will be about saving costs.

As a manager, you are particularly in demand. What is most important in such an extreme situation?
The most important thing is to keep track of everything we do, then bring this information together and use it to formulate and communicate clear guidelines for everyone.

How is the mood in the headquarters?
A little eerie for a few days, because of the otherwise almost 1200 people, only around 200 work on site at the headquarters. The others work from home. From tomorrow we will even reduce our presence here to virtually zero.