With the plan finalized, Otto’s accumulated private funds flowed out like water, and personnel training also commenced in full swing.
First, one hundred people were recruited. Besides being articulate, they also needed to be literate and understand basic mathematics. Otto entrusted this task to one of his attendants, merely providing guidance from the side.
It was conceivable that most customers of department stores in this era were nobles and wealthy merchants, with a small portion of the middle class at most.
To ensure service quality, these sales associates had to undergo basic etiquette training for nobles, which would elevate the department store's prestige.
As for the locations, the most suitable ones within the cities of the Bavarian Kingdom were selected, bought, and acquired.
Due to limited funds, some cities with low market potential could only be rented for the time being.
Once these properties were acquired, they would be simply renovated to mimic the most popular decoration styles of the era.
Overall, the requirements were not high, and unlike modern department stores that start with four or five floors, there weren't enough product categories to fill them. Many brands from later generations were still non-existent.
This led Otto to discover another source of wealth: luxury apparel also had excellent prospects; it could even be called a gold mine.
However, at this stage, the priority was to open the department store. He could wait until funds recirculated and there were surplus funds to consider it.
As for determining goods, contacting suppliers, and handling procedures, it was quite easy. He was a prince after all, and he had that much influence. Most of the time, a single word was enough to get things done.
This busy period, from finding partners, training personnel, securing locations, to decorating and stocking, took another five months. Otto’s department stores were finally ready in several major cities of the Bavarian Kingdom.
On June 18th, Otto chose what he considered an extremely auspicious day, and the department store finally opened.
Thanks to prior publicity among the nobility, a large number of customers poured in on the opening day, and entry even had to be restricted due to the excessive crowd.
Like the Chinese, many foreigners also enjoyed watching the excitement and gossiping. People were followers, especially when they saw many ‘distinguished’ individuals buying large bags of goods, those middle-class people with some savings couldn’t help but follow suit and buy.
The department store's profit did not disappoint Otto. On the first day, the turnover of the Munich department store alone, when converted, reached 4,600 pounds (as various currencies in Europe were quite chaotic during this era, and data was difficult to collect, pounds were often used for clearer comparison). The gross profit was as high as forty percent.
Currencies of this era were still on the gold and silver standard, pegged to gold, and most were even minted from gold and silver, making them very stable. Looking at this income, Otto’s department store business was entirely a golden goose.
Once sales figures from the other cities came in, it would most likely be another pleasant surprise.
However, it was also normal when you think about it. Department stores were a new concept, and the initial publicity was good. Being the prince’s enterprise, many Bavarian nobles also showed up to support the opening on the first day.
Many of these customers were not concerned about prices when buying things. Under the sales associates’ persuasive words, they vaguely bought a large pile of items.
This situation would certainly not last forever; it would gradually return to normal later, and turnover would also shrink. However, department stores in this era were still very competitive, and he believed they could live very comfortably.
As for competitors, none had appeared yet; they were probably still observing and learning.
Otto leveraged his advantage, initially expanding into major towns throughout the Bavarian Kingdom, and negotiations were already underway for surrounding countries and regions. By seizing the initiative, he would have a powerful first-mover advantage in the future.
Thanks to his success within the Bavarian Kingdom, Otto’s actions also became more aggressive, accelerating progress, and the expansion into areas surrounding the Bavarian Kingdom continuously and rapidly advanced.
For department stores in these neighboring countries and regions, Otto did not intend to monopolize them but planned to operate them as joint ventures with local influential figures, with Otto’s share varying.
For example, when opening department stores in smaller neighboring states like Baden and Luxembourg, he could take a larger share, roughly sixty to seventy percent.
In regions like Austria, France, and the Russian Empire, a share of thirty to forty percent would suffice.
Most of these department stores collaborated with local royal families. The royal families of these duchies and states were also very eager to strengthen ties with the Bavarian Royal Family.
As for regions where the Bavarian Kingdom had less influence, two or three more partners were introduced to avoid being excluded by local powerhouses, while also ensuring control over the local department stores by balancing all parties.
This also involved extensive personnel recruitment and training, especially for key management and financial staff, who had to be his own people to ensure he received his due share as much as possible.
This was also a huge challenge for Otto, keeping him incredibly busy during this period.
Besides training new personnel, he also had to address and resolve issues encountered in department store management. After all, this new business model was relatively unfamiliar to people of this era, and many problems were new.
At this point, Otto needed to devise solutions, and simultaneously inform all personnel about relevant situations. He also needed to compile some regulations for the department store staff to learn from.
Such rapid expansion also presented a huge test for funding. Not only were all the department store’s profits reinvested, but Otto even had to find a way to secure another ‘sponsorship’ from his father.
“It really is spending money like water. Although slowing down expansion could solve it, occupying the market as quickly as possible is the most important thing. To ensure the speed of expansion, I must find ways to increase income.”
After reviewing the latest financial statements and dismissing the accountant, Otto sat in his seat, pondered for a moment, then picked up the bell on the table and rang it.
Soon, the attendant, who had been waiting at the door, pushed it open and entered, bowing and saying, “Your Highness, how may I be of service?”
Otto said, “Go to the market and order a batch of items for me, then send them to my territory.”
“Yes, Your Highness,” the attendant respectfully replied. “Please instruct.”
“Fifty kilograms of glycerin, one kilogram of rose essential oil, five hundred 7-ounce glass bottles, and the same number of exquisite small wooden boxes, just large enough to fit the glass bottles… All items must be of premium quality; the price is not too important.”
After recording everything, the attendant respectfully said, “Your Highness, I will go at once.”
Watching the attendant leave, Otto fell back into thought. He hoped his idea would succeed and thus boost the department store’s development.
In fact, to raise funds quickly, the fastest methods were through the stock market or bank loans.
By this time, the stock market was no longer new in Europe; many countries had dedicated stock exchanges, and stock markets in places like Frankfurt, Paris, and London had been operating for decades.
However, setting aside issuing shares and dividends, it would inevitably dilute his control over the department store. The key was that if a major shareholder appeared, they would be able to inspect the department store’s accounts.
Otto had many plans for the department store moving forward, which required discreet handling of some funds, and he did not want any possibility of secrets being leaked. Therefore, Otto immediately rejected this option himself.
Another option was to seek bank loans. Given Otto’s status, obtaining a loan would not be difficult.
However, loans in those days also had some pitfalls, often with annual interest rates of ten or even over ten percent, which would be comparable to usury in later generations, giving Otto an impulse to open a bank himself if he had the chance.
Otto himself was not a pure businessman, coupled with his nature of safeguarding his own interests, which made him very cautious about loans. The most important thing was the many restrictions of this era; as long as there were other options, he would not take out a loan.
“So I hope this time I can solve the funding problem, otherwise, I will have to find a way to get a loan,” Otto muttered to himself. “Also, if I get the chance in the future, I definitely need to open my own bank and make money using other people’s deposits.”