Die another day

It has been suggested that ul. Chmielna in the centre of Warsaw is "slowly dying" and taking a stroll down there from ul. Szpitalna, it is difficult to ignore the empty shops, on whose smudged windows signs declare 'Likwidacja Sklepu', (Closing Down).

In the city's new temples of shopping however, the retail centres, planted amid large residential districts, hundreds of shoppers mill around at any one time. At a glance, it almost seems that these huge arenas of consumerism are sucking in customers from the streets, never to return them.

Awkward ownership
Whilst no major city is defined by how or where its citizens shop, local purchasing habits do of course play a significant role in adding shape to a city: London, for example, wouldn't be quite London without Oxford Street. Perhaps Warsaw's main high streets, ul Chmielna and Nowy Swiat, will always struggle to become magnets for the city's shoppers, given the total destruction it suffered in World War 2 and the displacement caused by Communist-era reconstruction. Pre-War Warsaw was by contrast a bustling metropolis. There is also the awkward problem of property ownership in the centre, according to Peter Evans of Lambert Smith Hampton: "in Warsaw, buildings [which house shops] are owned by individuals whereas with Oxford Street, each side of it is the property of a different pension fund, which means amalgamating buildings is easier and you can create more viable shopping units".
The issue of ownership, this time of land in Warsaw, is also one reason those hulking retail centres have been cropping up well away from the CBD. They've been developed, says Ian Elliot of Jones Lang LaSalle, "at the fringe of town because land was available there. They were the only places retailers could go," who he adds however, are "are still keen on the town centres". There also remains the open question of Złote Tarasy, which will be Warsaw city centre's first shopping and leisure complex: will it augment ul Chmielna just across ul. Marszałkowska, or will it draw custom away? Only time will tell. But along with this latter possibility and the land and property ownership concerns, retailers are arguably discouraged from the central high streets, by rents which can be as high as USD 100 sqm.

New high street stores
LPP is perhaps the most high-profile Polish clothes' retailer and its brand name 'Reserved' is ubiquitous on billboards. Most of its shops, 95% of them in fact, are based in retail centres, because according to Donat Ciepłuch, Development Manager for the 'Reserved' brand, they "are open seven days a week, work long hours" and "guarantee sales because of the large number of customers". However, recent moves by the firm suggest that it has by no means turned its back on the high street for the cosiness of retail centres and they have been opening stores in both, in equal measure, over the past few months. They with many others, opened a new store in Wola Park in Warsaw recently but also signed an agreement with Ceraco Development for a unit of 241 sqm, to open for business in May next year, and this will be located in one of those empty shops on ul Chmielna, (bringing LPP's total number of shops in the vicinity to three). Another contract was signed recently with developer 4M for shop premises on ul. Florianska in Kraków, and is also to open next year, (though the retail situation in the old Polish capital is another story). So is talk of the demise of Warsaw's high street premature?

Marketing role
Retailers open shops on the high street in the capital, for rather different reasons than they do in shopping centres, as Magdalena Gniazdowska of Cushman & Wakefield H&B points out: "shopping centres generate most retail turnover and high street locations are the "exclusive label" for retailers". In her opinion, "the potential of the high street, especially in Warsaw, remains unutilized". But Donat Ciepłuch for one is keen not to downplay the significance, though less profitable, of high street shops in his company's overall performance, "they play a very important marketing role and are an essential part of the company's advertising campaign," he says. Their salient visibility to passers-by is something retail centre outlets don't quite have after all. The level of sales in both is in fact, comparable from Monday to Friday, though inevitably the longer opening hours in retail centres from then on, mean that there, "the number of customers increases drastically and so do sales".
Henrik TheilbjNrn PR Manager of the Danish retailer IC Companys, of which ICC Poland is a subsidiary, and who run the Jackpot & Cottonfield and InWear & Mantinique shops, (there are around forty in Poland) admits that because "shopping centres in the big cities are booming, we are at the moment opening only in the malls, though we already have shops in the main high streets." This current trend needn't however signal any irreversible decline in high street retailing and though the high rents on Nowy Świat and ul. Chmielna, might well be considered an obstacle to profitability, TheilbjNrn suggests we bear in mind, that "personnel costs are much higher in shopping centres".

Shops in transition
That those dark shells, once fully-stocked with footwear and clothes on ul Chmielna, look very forlorn is undeniable but appearances can be deceptive. They are actually just shops in transition and are unlikely to be empty for very long. The post-Communist tendency for former owners of buildings, which were appropriated by the state after the Second World War, to reclaim their ancestral property is responsible for the temporary barrenness. The buildings in other words, have just changed hands. As well as LPP, clothes' retailer Orsay and Ecco Shoes will be moving into the premises on Chmielna 3. Formerly owned by the local authority and currently being refurbished by Ceraco Polska, Director Sergiusz Madurowicz, claims that previously the building, "was in a poor condition and badly maintained" and that Ceraco are now installing a new heating system and air-conditioning for the new tenants.
But back further up ul Chmielna, just before ul. Szpitalna, were the blank interiors of the units are such a depressing presence, there is also regeneration on the horizon. The Italian clothes' retailer Terranova has acquired some of this space, (from a private owner), and are refurbishing it, with a view to opening a 5 to 600 sqm shop, in "over a year's time", according to spokesman Massimo Manente.

Back to the high street?
The boom in retail centre development, has caused some insiders to become very concerned about over-supply, particularly in Warsaw, with Adam Murza-Murzicz, Chairman of developer Mysia 5, quoted by Property Week's November Central and Eastern Europe supplement, as saying that "we are heading for disaster". This is something, however, that Ian Elliot of Jones Lang LaSalle will have no truck with, "Blue City is the only new shopping centre in Warsaw which is speculative, so any talk of saturation is rubbish," he says. But should some of the sheen of those malls come off, might the high street benefit?
"More and more developers are beginning to invest in high street retailing," says LPP's Donat Ciepłuch, "in two or three years these streets in Poland will regain their position: the one they had when there were no shopping centres in the country."