Waiting for Gucci

The most prestigious stores in Warsaw can be found in one of two locations. One is around pl. Trzech Krzyży, where a Bvlgari boutique recently opened offering luxury accessories and jewellery. This area includes ul. Mysia, ul. Mokotowska and the Vitkac department store, where Louis Vuitton has a boutique. The others are around pl. Piłsudskiego, which includes the Metropolitan building and one of the city’s most exclusive hotels, Raffles. This building houses Hermes and Brunello Cucinelii stores as well as an Aston Martin showroom. Most luxury brands in Poland operate on a franchise basis or with a partnering store. Top-shelf goods are, of course, available but only with a limited range – and even though the appetite for luxury brands in Warsaw is growing, we are still going to have to wait a while before they appear.

Still too early for Chanel and Prada

For the moment, there’s no economic justification for opening a flagship store for a premium brand. Again, not enough Poles have the money to afford to go shopping in such fashion capitals as Milan and London or somewhere closer, like Berlin, Vienna or Prague, which are all cities that have become popular exclusive shopping destinations in recent years. Tourism has a direct correlation with the footfall seen in stores, especially when it comes to luxury goods. Warsaw is also a much-visited city and is growing in importance, not only for tourism but also as a business destination. But not many Asian tourists, who help to drive the demand for luxury goods in the West, visit Poland. Warsaw was actually ranked as the best destination by tourists from 178 countries in the best European destinations ranking of 2023 in CBRE’s High Street Report 2024. It has vast potential in this regard. According to Karolina Kunciak, the associate director for high street retail at CBRE, even though the number of tourists coming to Warsaw fell during the pandemic, it quickly recovered. Tourists are only too keen to visit the shopping streets. It’s also worth noting that the average income in most countries whose tourists come to Warsaw is higher than in Poland. Despite all this, Poland is still regarded as a developing market when it comes to luxury goods. The big players are watching this country waiting for the market to mature. As though they are saying, “one day for sure, but not right now.”

Luxury at affordable prices

The situation is totally different when it comes to premium brands. Many Poles are eager to buy what could be termed as luxury goods at an affordable price. Such brands are becoming more interested in Poland and are more eager than ever to appear on Warsaw’s streets, but the problem is the lack of suitable locations. “Premium brands are interested in coming to Poland. We have had many enquiries from fashion brands that are not here yet, but we are not always able to meet their expectations when it comes to store size and location,” admits Karolina Kunciak. London has Regent Street, Berlin has Kurfürstendamm, Paris has the Champs-Elysée, and Prague has ul. Pařížska. Warsaw still does not have its own real shopping high street. Why not? There are many reasons for this – including the history of the city and its communist past, which can still be seen in its chaotic urban planning and the ownership rights to stores. Its high streets are few and far between and it doesn’t have the kind of neighbourhoods that premium brands require. Karolina Kunciak expands on this point: “Some stores are in private hands, some belong to the city and some to the state. It’s difficult to meet the expectations of all interested parties,” she explains. Tenants and premium brands in particular require the right surroundings. Clothing brands like being located near other large stores. Clothing brands want to open next to other clothing brands. So far, opening up next to other kinds of outlet, such as restaurants, hasn’t worked out. On Nowy Świat, alongside all the fancy cafés, you can find all-night kebab shops, while perfumeries rub shoulders with currency exchanges and 24-hour stores. And this is not the only challenge. “Another problem is the lack of large spaces. There are townhouse tenements that generally have small store units of up to 200 sqm. Clothing brands are looking for something bigger, ideally 500–2,000 sqm. Here again, the problem of ownership crops up. In theory, you can knock down adjoining walls, but this is not in the interest of the owners. Warsaw’s historic buildings conservation department is of little help in this regard, since it is reluctant to give permission to make such changes to historic buildings, which is exactly what most of them are on the city’s high streets,” adds Karolina Kunciak. Answear.com highlights exactly the same problem: “We considered locating our store on a shopping street, but high streets still don’t really exist in Warsaw. The streets we looked at didn’t give us access to the right target group, they didn’t have enough space, or they simply didn’t provide the right level of comfort for shoppers either due to inadequate parking or because of the general dilapidation of the area,” explains Kamil Bajołek, a brand director at PRM.

Mixed-use beats town-house

One solution to the lack of high streets or rather to the complex and flawed state of Warsaw’s city centre is provided by the ultramodern mixed-use renovation projects that have been springing up all over the city, such as Norblin Factory, Elektrownia Powiśle, Browary Warszawskie and Hala Koszyki. Such developments fulfil many different purposes and are city-forming. Most importantly, they can attract all the target consumers under one roof. The owners of Answear, which debuted just a few months ago in Warsaw, decided in the end to open their store in Norblin Factory. “When we chose this location, the first thing we took into consideration was where our customers are. Warsaw’s city centre is currently shifting towards Wola district. A lot of office space and many luxury apartments have been developed there and are still being planned. Norblin Factory itself is a premium lifestyle and entertainment centre, so what we offer fits right into it,” explains Kamil Bajołek.

Outlet centres can also be premium

Premium brands in Poland are also keen on being sold from outlet centres. Stores in such centres are most often secondary sales channels, so they are usually brands that can be found in normal stores. In Designer Outlet centres many premium brands can be found, such as Michael Kors, Armani, Furla, Pinko, Twinset and Lacoste as well as brands owned by PVH and Boss. One new premium brand that will also soon be appearing in Designer Outlet Warszawa is Boggi Milano from Italy.

According to Krzysztof Gaczorek, the CEO of KG Group, which is developing Designer Outlet Kraków, one of the reasons brands choose outlet centres is for greater recognition and to reach customers that have previously had no access to certain brands. “By being present in outlet centres, brands can reach a wider range of customers and thus broaden their own sales chains. Additionally, premium brands can sell off their surplus goods and their collections from previous seasons while selling their latest collections in regular stores,” he explains. Outlet centres are profitable for premium brands, generating additional revenue and profit. They are also attractive to consumers mostly because they offer top-shelf goods at attractive prices.

Luxury brands around the world also use outlet centres for their own sales channels, but Poland is not yet ready for this. “Such stores can be found in select outlet centres in countries where the market for luxury brands is more developed, such as Italy, France and the UK. The rise of luxury brands in outlet centres follows the development of full-price channels in city centres or high streets, so Poland has still not reached this stage,” insists Dawid Rutkowski, the asset and development manager at ROS Retail Outlet Shopping.

The hope of a new central Warsaw

Shopping centres and mixed-use complexes, despite being beautiful, clean, safe, convenient and undoubtedly city-forming, cannot replace high streets. In a healthy, growing city, there has to be space for these kinds of facilities but also for high streets that bustle with life and give authenticity to a city making it unique. The Nowe Centrum Warszawa project, which is currently under construction, holds out the hope of creating space that is both friendly to residents and attractive to investors. It is an ambitious project intended to breathe new life into the city’s streets and reshape central Warsaw into a modern city. Karolina Kunciak is optimistic that by rebuilding the city centre in this way many important points in Warsaw will be joined together to create a unified neighbourhood making it easier to move around and provide greater access to its main attractions. “There’s going to be more green space – places to relax and spend time in. As a result, residents and tourists will have better access to shopping streets,” she foresees. A foot and cycle bridge has already been built across the Vistula as part of the project, while pl. Pięciu Rogów and ul. Bracka have been revitalised and work is underway on renovating ul. Chmielna. Soon, ul. Krucza and ul. Zgoda will also be given a facelift and underneath pl. Powstańców a long-awaited car park is to be built. The area surrounding the Palace of Culture will also be improved, having been neglected for a decade. Opposite Domy Towarowe Centrum on ul. Marszałkowska (which in the 60s was a Warsaw landmark), the Museum of Modern Art is just about to open its doors with a park behind it instead of a concrete wasteland. All of this holds out the hope that this comprehensive renovation of the city’s centre will make Warsaw more attractive not just for residents and tourists, but for consumers and high street retail investors.