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Swiss homevideo retail closures will hit physical media market footprint

Electronics and home video retailer Saturn has announced the closure of two of the six stores currently operating in Switzerland, with the remaining four set to be re-branded as Media Markt locations. Both retailers are owned by the same Swiss subsidiary of German retail giant Media-Saturn-Holding GmbH, but compete against each other in several European markets as distinct brands with a similar product offering.

The Swiss subsidiary, Media-Saturn Management AG, reported turnover of CHF967m (€787m) in 2012, according to IHS Screen Digest in a 'Analyst Commentary' note.

Ex Libris, the book and entertainment software retail arm of Swiss grocery giant Migros, has also announced store closures for 2013. After having already closed a reported six locations in 2012, a further 20 to 30 Ex Libris locations are to cease trading over the next 18 months. With 107 in operation at year-end 2012, this represents a closure of approximately one in every four Ex Libris stores. The retailer announced CHF153.8m (€125.2m) in net revenue for 2012, a year-on-year decline of 8.8%, following on an 11.4% decline reported in 2011.

Saturn had been a recent addition to the Swiss retail landscape, having only opened its first store in 2009. According to a statement by Media-Saturn Management AG, the retail chain faltered partly due to poor location choices. In contrast, Media Markt has been operating in Switzerland since 1994.

"The impact of the withdrawal of the Saturn brand from the Swiss video market is not expected to be significant," says Tania Loeffler, analyst with the market research firm. "The total number of bricks-and-mortar locations providing consumers the opportunity to purchase physical video will only be reduced by two. The addition of these Saturn locations means that Media Markt will now operate 25 stores in Switzerland, 17 of which will be located in the German-speaking cantons."

Loeffler attributes the closure of 20-30 Ex Libris locations to current difficulties in the physical book trade as opposed to a direct consequence of the decline of physical video sales in Switzerland. "Other Swiss booksellers, such as Orell Fuessli, are also reporting a significant decline in sales and difficult market conditions - due to increased competition posed by online book retailers."

At the time of writing it has not been announced which Ex Libris locations are to be closed, however, anecdotal feedback suggests the chain's flagship store, located in the Bahnhofstrasse shopping district of Zurich, may be among the selected locations. "Though many of the other Ex Libris locations earmarked for closure are likely to be those operating from smaller retail units, the volume of closures will impact on the number of convenient opportunities for Swiss consumers to purchase physical video," comments Loeffler. "This will have the effect of further reducing impulse purchasing and in-store promotional exposure crucial to driving new release DVD and Blu-ray Disc sales."

Story filed 09.05.13

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