In the first half of 2026, around 26,000 square metres of German retail take-up went into the re-letting of former Galeria and fashion department stores — roughly eleven per cent of the 238,000 square metres recorded across the market for the period. The more interesting question is not how much space is being vacated, but who moves in. In prime locations the answer is increasingly the same: beauty. Beauty expansion in Germany is taking the units that would automatically have gone to fashion five years ago — and it does so with a space profile that fits many hard-to-let floor plans considerably better.
The movement is real, but it is small-scale
Take-up in the first half of 2026 reached 238,000 square metres, five per cent below the same period last year (251,000 square metres) but still above the average since 2020 of roughly 228,000 square metres. The market is active — the activity is simply distributed differently than it used to be.
The size brackets make this clear. In March 2026 Douglas opened, among others, a 181-square-metre store in the Düsseldorf Arcaden and a 173-square-metre store in the BlechenCARRÉ in Cottbus. These are not anchor units; they are classic high-street formats. The group intends to operate around 200 additional stores by the end of 2026 — net of closures. At the same time Douglas has announced it will slow the pace of new openings in existing markets and invest more heavily in online and modernisation. Both belong together: expansion continues, but more selectively.
For owners this means: waiting for a single large tenant to take 1,200 square metres may mean waiting indefinitely. Treating the unit as divisible produces several interested parties from a segment that is actively building out its network.
80 to 250 square metres — the format in demand
Beauty concepts rarely need much space, but they need the right space. Footfall, shop frontage and ground-floor position matter; depth does not. A unit of 80 to 250 square metres with a wide frontage in a high-footfall location is more attractive to this occupier group than twice the area in a secondary position.
This matches what we described in our article on Gen Z consumer behaviour in the city centre: small units for beauty and food-to-go and large-format experience space are in demand, while the classic mid-range between 400 and 900 square metres is the hardest to fill — the core theme of our article on retail right-sizing. Beauty does not solve every vacancy problem — but it does address precisely the segment in which most city-centre locations hold the majority of their units.
There is also the question of investment appetite. Since August 2026 Rituals has been refurbishing around 1,500 boutiques across 30 countries at a cost of roughly 40 million euros, with completion scheduled for the end of September. At the centre is a new area concept bringing skincare, make-up, hair care and eau de parfum together. Brands that put nine-figure sums into their existing estate across Europe negotiate differently from concepts that expect the landlord to fund every fit-out.
Four groups behind most of the brands
Anyone letting to the beauty segment should understand the ownership structure. The brand on the shopfront and the organisation that decides on locations are rarely the same thing:
- Puig — a third-generation Spanish family business headquartered in Barcelona. Owned brands include Rabanne, Jean Paul Gaultier, Carolina Herrera and Penhaligon’s, alongside licences such as Christian Louboutin. The German entity is based in Hamburg and runs distribution for the German market from there; DACH distribution for Hermès has also sat with it since 2022.
- L’Oréal — the broadest group in the market, from mass market to luxury. Aesop has been wholly owned since 2023 and is one example of a beauty group operating its own retail rather than only supplying it.
- Coty — strong in licensed fragrance brands from the fashion and luxury world.
- Nobilis — a distribution house bringing niche and premium brands into German-speaking retail, and effectively the route to market for many smaller houses.
The practical consequence: an enquiry addressed to the brand usually lands in marketing. The location decision is made in the expansion or retail department of the group entity — which is not necessarily based anywhere near the property.
Fragrance has the most momentum — and needs the smallest units
The niche fragrance segment is growing faster in Germany than the perfume market as a whole, at an estimated ten to twelve per cent a year. It shows in standalone boutiques in selected locations: Le Labo and Byredo in Berlin-Mitte, Diptyque on Munich’s Maximilianstrasse, Frédéric Malle in Munich and Hamburg.
These concepts are space minimalists. Sixty to 120 square metres is enough, but the location requirements are uncompromising: a luxury or premium environment, quality of footfall rather than volume of footfall, immediate adjacency to fashion and jewellery in the same price bracket. For owners on Maximilianstrasse, Neuer Wall, Königsallee or Goethestrasse, this is one of the few occupier groups that will take small residual units at premium terms — provided the surrounding tenant mix is right.
The blind spot: brands without their own network in continental Europe
The most interesting prospects are brands that are well known in Germany but do not yet operate a store here. Charlotte Tilbury is currently the clearest example: in 2026 the brand entered Greece (ten locations), Romania (nine locations) and Belgium through Sephora partnerships. Its only physical presence in Germany so far is at Munich Airport, Terminal 2 — not in a city centre.
From a landlord’s perspective, this is the real opening. Brands at this stage are building rollout structures for continental Europe but have no fixed German location pipeline. Anyone who can put a specific unit, a footfall profile and a solid catchment analysis in front of them at this point will be heard. Twelve months later the expansion list is written and conversations run through the usual channels. How crowded that race then becomes is the subject of our analysis of how international retail brands are taking Germany’s prime locations.
What owners can do
- Review the floor plan, not just the rent. A 400-square-metre unit that can be split into two units of 180 square metres has a far wider pool of interested parties in the beauty segment than the same unit undivided.
- Clarify technical feasibility early. Beauty units need water connections, ventilation and often treatment cabins. What is technically and legally possible should be established before the approach, not after.
- Document the surroundings. For fragrance and premium concepts, the tenant mix within a 200-metre radius is the decisive argument — not the size of the city.
- Approach the right level. Expansion and retail managers at the group entity, not brand communications.
- Price in flexibility on term. Brands building a network rarely commit to ten years straight away. Shorter initial terms with options — calculated on an effective-rent basis — cost less than another eighteen months of vacancy.
Conclusion
Beauty does not replace a department store and it does not rescue a secondary location. But the segment is doing something that is currently rare: it is building a network in Germany, investing in its own fit-out, and looking for exactly the small ground-floor units in good locations for which fashion is no longer a realistic successor. The German cosmetics market, in the low tens of billions and forecast to grow at around four per cent a year, is large enough to sustain that expansion for years. What matters is whether a unit matches the search profile and whether the approach reaches the right place in the group — not whether there is demand.
Frequently asked questions about beauty expansion in Germany
What kind of space are beauty concepts looking for?
Usually 80 to 250 square metres at ground level with a wide shop frontage in high-footfall locations. Niche fragrance boutiques manage with 60 to 120 square metres, but in return demand a premium environment with a matching tenant mix.
Why are cosmetics and fragrance brands expanding right now?
Three factors coincide: fashion is vacating small ground-floor units in good locations, the category is growing steadily at around four per cent a year, and the groups are increasingly investing in their own retail rather than only selling through third parties.
What should owners clarify before making an approach?
Technical feasibility (water, ventilation, cabins for services), documentation of the surrounding tenant mix, and the right addressee: location decisions are made in the expansion department of the group entity, not in brand marketing.
UNIQUE RETAIL advises owners and brands in the beauty and fragrance segment — from assessing whether a unit is suitable, through approaching the expansion decision-makers, to closing. Get in touch.
