ISO Congress 2006, Warsaw

Congress business theme: CHANGE.

Presentation of Shopping Centre trends in Poland and Europe in the last decade, 10.06.06.

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Stephen Pragnell

The enthusiastic speaker, who addressed the ISO audience on the Saturday morning Congress seminar, 10^th June, 11-13:30 is Stephen Pragnell, General Director, APSYS Polska and president of the Polish Council of Shopping Centers. APSYS being a French construction- and management-company of Shopping Centres; Stephen Pragnell born in Britain, educated in France, has about 7-8 years of experience in Poland. He really knows, what he is talking about, and he kept the audience breathless for a good 2-3 hours, forgetting time and lunch and anything but the changes in the exciting world of retailing and shopping mall developments in Poland and in Europe. BRAVO!

 

Shopping Centers - Any changes?

In Western Europe we are used to shopping malls since more than 25-35 years, and we have had changes, but honestly, not much. In Poland and other former communist states, shopping centres have been introduced to fill an enormous gap, over the past approximately 10 years; and in that short span of time, they have changed a lot!    

 

Polish shopping centres are popular, the people have taken them to their heart, and the story of Apsys Polska is very much the story of the Polish Shopping Center. They have taken the words of famous French poet Jean Cocteau and made them their own: "We must do today, what everyone else will be doing tomorrow".

 

Apsys and their first success JANKI

Apsys was established 1996 in France and already in '97 in Poland, to develop and manage Shopping Centres. Today this includes (PL + F together) more than 1.100.000 m2 of retail space! They invoice over 1300 leases per year and are visited by over 75 mio customers. In Poland today they manage 16 centres plus 5 leader-price-centres in cities.

 

Apsys is p.t. developing Wzgórsz, 25000 m2 in Gdynia, Tacina, 83.500 m2 in Poznan, 30.000 m2 in Wroclaw plus a lot of projects in France, Angers, Beaugrénetl in Paris, Les Halles in Orléans, le Fil Bleu in Saint-Nazaire, la Casime in Grenoble, l'Heure Tranquile, Aparc, Bordeaux Lac, Moulin..

 

Warsaw has one of the biggest population concentrations in Central Europe and yet, in 97 there were only 12 shopping centres in Poland, in '00 another 11, in 05 another 10 plus 3 extensions and another 6 under construction plus the "TESCO" Hypermarket + shops. And this trend is not only continuing, it's still accellerating!

 

JANKI in 1999 was one of the first in Warsaw, a Mall and some large "boxes" and immediately a huge success. JANKI attracted people from the city (population ca. 1,7 mio), but the rapidly increasing competition from new downtown retail concentrations, such as Galaria Mokotow, Promenada etc. caused JANKI to gradually loose the urban customer base, forcing the management to reinvent the concept. Today JANKI is successfully attracting the clients from outside Warsaw.

A catchments analysis shows 204.360 close customers from a weighted area to the South-West.

 

Co-owners of the centre are Géant, Cinema City, G.E. Finance (extremely demanding) and a European/Polish Finance Group, and the marketing is jointly integrated with all the retailers involved, which include Ikea, as an important magnet.

 

A re-launch of concept like this is typically needed with a 5-year cycle to maintain the customer base and re-establish growth. New brands, such as EMPIK (like FNAC in France), convenient location (look at the traffic patterns), many, and new stores, and attractive offers are key elements.

 

European Shopping Center trends are set.

Here's a list of some sites worth visiting:

Life-style Centers like Bluewater near London as a first example. Others are Storgatan in Malmö, Bruno Gotgatsbacken in Stockholm etc.

Landmark architecture and city developments: Bullring in Birmingham, Manufaktura in Lodz, Whitefriars in Canterbury, Parade in Nootdorp NL, Fleur d'Eau in Angers F, Klanderij in Holland, les Grand Pres in Mons B, Marschallkowska in Warsaw, Dolce Vita in Coimbra Portugal.

Mixed are a.o. Xanadu in Madrid E, Snow Park in Dubai, Ski Storcenter N (in the heart of the City).

 

Strong new trends are the integration of culture and leisure. As well as repairing errors of the past. An example of the last is the Estacao Viano in Portugal, where the shopping center "heals" a city, split by a river and railway. In Principe Pio in Madrid, an ugly malfunctioning railway station is turned into a modern, effective combined market place and traffic junction.

 

Adapt to the local culture

The audience particularly noted the attitude of Stephen Pragnell, that surely is an important part of Apsys' success in Poland. "Think Globally - Act Locally". It is OK to build modern Shopping Malls, but maintain the roots, the national culture, the link to the past.

 

A good example is the Culture Palace of Warsaw, the "wedding cake" of a building in the City Centre. A "present" from Stalin in those days, ugly (?), but part of the culture, of the history, the past. Many locals would have broken it down in euphoria of  Poland becoming independent, but fortunately it's still there. (The ISO spouses' first sightseeing was the view of Warsaw from the 30^th floor, top of the Culture Palace.)

 

The name Shopping Center has become a "bad word" in many countries. Maybe because they have not been established with the veneration for local history and culture, that Stephen Pragnell finds so important. But in Poland, with a population of 40 mio, loving their shopping centres (those who have access), there are many more underway.

 

Stephen resumed the history:

- Old days? Old fashioned markets?  We don't go that far.

- 70-80's? The State owned stores & markets? Let's hope the "Hala Mirowska survives a tender

  renovation. We don't want to loose it.

- Local concepts? The "Russian Market" at the old Stadium has turned into something ugly, and

  will probably be demolished sooner or later. To nobody's regret.

 

The original US definition of a shopping center is:

"A scheme that is planned, build and managed as a single entity comprising units and communal areas with a minimum sales are of 5000 m2 (?)" In Europe it developed as follows:

 

1^st. Generation (e.g. in France):

A Hypermarket with small-cashpoint malls and medium sized units outside. In Warsaw, the Ursinow Shopping Centre is an example.

 

2^nd Generation:

Larger Shopping Centres/Malls anchored by Hypermarket(s) and/or Supermarket(s) plus a number of stores, restaurants etc.

 

3^rd. Generation:

Example the ARKADIA. Which is concentrated efficiency, a selling machine that says: "Come and shop" - a lesson to the retail trade (and there are some fabulous retailers here in Poland):

Be as efficient, as we are, or bust!

 

Today:

Examples of the latest generation are:

- Silesia City Center in Katowice. 65.000  m2 in an old coalmine, and it's kept the coal mine feeling! There's even a chapel in there.

- Zlote Terazcy. 63500 m2 shopping center next to the Warsaw Central Station, a total area of 225.000 m2 includes offices, hotel, underground parking, and the World's largest undulating glass roof over the central Plaza.

- Wroclaw, 51.000 m2 by Pasaz Grunwaldsky, a Polish developer and top player in this field.

 

Benchmarks

The above mentioned Arkadia was awarded "Best center, large" by ICSC 2006 together with Whitefriars in Canterbury. Other benchmarks are Galeria Todzka, Lodz 2004, and the Story Browzar, Poznan 2005 (a must see: "A lady had a dream!"), and then of course now, in Lodz:

The Manufaktura!

 

Shopfitting! A business with a past or a future?

As shopfitters, and critical so, the ISO audience asks the question: "Can we keep (shop-) fitting out centres and retail concentrations in the future as before?

If you want to hear the good news, here's the answer:

 

"We have come a long way in the 17 years with a free Poland. Some go crazy with the selection of goods, there are so many shoe shops in some of the new centres, that you would believe every customer buys a pair a day!" said Stephen. The Auchan (Hypermarket) in Bialystock, East Poland has the highest turnover of any Auchan market in the world.

But 61% of the Poles do not have access to a modern shopping centre today!

 

If you look at the existing Shopping Centre space per Capita in Europe today, Norway and Sweden are the leaders! If you want the same coverage in Poland, you need 500 more shopping centres!

 

In Russia, using the same benchmark, there is room for 2.724 new shopping centres!

Bulgaria, Romania etc. are all the same!

 

The growth in countries like Spain and Italy is huge! There's so much in the pipeline!

 

The MANUFAKTURA in Lodz

One of the most interesting of all the mentioned projects is without any doubt Apsys' new  MANUFAKTURA in Lodz. 

 

Grand opening May 16, and a destination on next year's ISO Incentive Tour (Oct. '07).

 

It is an ongoing project, transforming the city of Lodz and it's whole infrastructure drastically. Involving not only a huge mall of stores, markets (open air as well), cinemas, restaurants, but also a complete new "downtown" city area with fountains, children's village, family entertainment, crafts, offices, Hotel, City Historic Museum, Fitness Club, Museum of Modern Art and a Museum of the Site! And I am sure I have forgotten something.

 

Did anybody say "shopping centre?" Then you better change your mind. It is so much more, and that's the TREND!

Integration of culture and leisure, maintaining the local roots and identity. 

And a trend very much set in Poland, that is!

 

Stephen presented a movie about the history and development of the Manufaktura.

A textile factory with roots in the 19^th century, with 12.000 employees and covering 27 Hectares of central Lodz, went bankrupt in 1997!

 

To make a very long story short, Apsys undertook the challenge of transforming the factory and premises into what is now MANUFAKTURA, a landmark of a "Shopping Center" integrating an ambience of the past splendour and decadence of the City of Lodz. Just imagine the emotions involved of the 12.000 unemployed workers, their families, the business associates, that had to be delicately handled and taken into consideration as well.

 

The movie shows how the company succeeded in transforming the biggest factory in Central Europe, and a classified city site into a centre of social life, new trends and styles, and open to everyone. A centre of local culture, full of local identity, and we are absolutely sure: An international Shopping Centre success and benchmark for our industry.

 

End of the ISO business seminar, beginning of a change of mind?

The lecture was over. Stephen Pragnell could have continued as long as time allowed, and I am proud to tell, that he got TOP GRADE, on ISO's evaluation schemes after the congress. He is a natural speaker, burning for his case, BRAVO again. We all got new perspectives, widened horizons and a mind change about Poland, East Europe, Shopping Centres and their shopfitting in the future, I am sure.

 

Unfortunately the Congress program did not allow that, but we shall all find an opportunity to visit the MANUFAKTURA  -  soon! *)

 

Preben Bailey

ISO secretary general

 

*) ISO has decided that the ISO Incentive Tour in October 2007 with meeting point Warsaw will include MANUFAKTURA, Wroclaw, Krakow and possibly Poznan. More about that later.

8.-22. October 2006 the Incentive Tour goes to North Italy and Milano, see separate headline.

 

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