Cut from the same cloth
Outlet clothes stores are very much in fashion this autumn. Neinver Polska has just launched construction of its second outlet center in Poland and the company is now working on further projects in Warsaw, Szczecin, Kraków and Poznań. After opening the Fashion House Outlet Centre in Gdańsk earlier this month, The Outlet Company is now starting its next outlet in Piaseczno, near Warsaw. This month the Polish Vabbi Factory Outlet also opened its 23rd store in Puławy.
The market of outlet centers is gaining momentum in Poland, just as it was in the 1960s and 1970s in the US, which is the birthplace of the concept. At that time, big shopping centers, called factory outlets, were springing up in the suburbs of American cities. There, producers were selling their quality production surplus. Now the US has some 400 such complexes.
in 1990, due to the dynamic development and globalization of the textile sector, the first outlet centers made their way to Europe, first in Great Britain and then France. Since then the number of outlets has been rocketing, especially in Germany, Italy, and Spain. At the moment there are some 100 outlets on the continent with a total area amounting to 1.6 million sqm.
Everyone's a winner
From the producers' point of view, outlets enable them to sell their production surplus, and so launch their new collections faster and wider. They set their branded shops in the outlet complexes and sell their products 30 to 70 percent cheaper than in regular shops, all year long. As the outlets sell production surplus or the leftovers from current or previous collections, customers cannot expect to find a full range of sizes and models, but the low prices are usually ample compensation .
In Poland the outlet boom has just begun, and already there are a few companies claiming they were pioneers in this country. "We were definitely the first outlet company in Poland," says Mariusz Szeib, the president of Semax, the company that owns the Vabbi Factory Outlet (VFO). It opened its first shop in 1999 in Poznań and Szeib stresses that the chain is an outlet network, which he says is different from the big concerns that are just coming to Poland.
"Companies such as Neinver Polska are big developers who first build huge complexes in the suburbs in order to lease the space to various companies. We are in the city centers and it is easy to reach us. Besides, we act on our own - we buy the products and sell them ourselves in our own shops," says Szeib.
Profitable partnership
Vabbi, just as in the big outlet centers, sells quality products, but the sales are based on partnerships with the producers. They sell the brand products of Nike, Puma, Reebok, Adidas, and casual clothes by H&M, Zara, and Reporter, according to a year-round discount base. However, Vabbi does it in stores where the space is 300 sqm to 700 sqm, and not in cavernous 20,000 sqm retail outlets, as the big players do.
Szeib estimates that the company's turnover will reach zł.32 million this year. At the same time he says that the firm is mid-way through its development. "There is still a lot to be done on the Polish retail market. A long time has to pass until it is saturated." According to Szeib, Vabbi has a minimum 50-percent share in the Polish outlet market. The company is also taking its first steps in foreign markets in the region. In September Vabbi opened an outlet in Vilnius in Lithuania, and is now planning to launch stores in Ostrava in Czech Republic and in Kovno, Lithuania. "Building up our network should end by 2007. Ultimately, we want to open 50 stores," says Szeib.
Vabbi is hyping up the opening of its stores just as much as the international giants. The company's new face is the famous Polish plumber, Piotr Adamski, who was the star at the opening of Vabbi's 22nd shop in Zielona Góra.
Luxury offer
Another player that wants to be Poland's top outlet company is Neinver Polska. It appears the company was the first one to open American-style outlet stores in Poland. In December 2002 the company launched the Factory outlet in Ursus, Warsaw, on an area of 8,700 sqm. Now, at a cost of zł.8 million, the company is improving on the centre, expanding it to 13,000 sqm. Barbara Topolska, the general director of Neinver Polska, says that more luxurious brands will be offered in Ursus. This changes the profile of Polish outlets to date, as the products available in the local outlets had mid-range prices. In Europe and the US, outlets typically sell exclusive products that in the high-street stores would be beyond the pockets of the average customer.
Neinver also laid a cornerstone in Wrocław on the construction site of the company's second outlet. At a cost of EUR 20 (zł.79.6) million, the company will build a complex of 13,000 sqm. The first stage will be finished in spring 2006. "The success of the first outlet made us think about further development on the outlet market," said Topolska. "Neinver plans an intensive development on the Polish market. We want to develop further investments in Szczecin, Kraków, Poznań and Warsaw," said the president of Neinver Polska, Pedro Potocki-Radziwiłł.
Neinver launched its first outlet in Spain in 1996. Poland's Ursus was the company's fourth store. At the moment the company owns space of 67,000 sqm and is considered the fourth-largest player on the European outlet market.
Keeping it local
A firm that considers its outlet network as a classic one is The Outlet Company (TOC), which, by the end of this year will have three outlets in the country.
Functioning for more than a year, Fashion House Outlet Center (FHOC) in Sosnowiec, in the south of Poland, was the firm's first outlet venture in Poland. This autumn TOC is starting two other ones, in Gdańsk, and in Warsaw. The value of the two previous investments was EUR 30 (zł.119) million each.
What differentiates the company on the market is that each of its investments architecturally refers to the store's surrounding areas' local history and tradition. The FHOC in Sosnowiec is modeled on 19th-century English industrial architecture, as the Silesian region is traditionally a steel and coal mining region. The Gdańsk outlet of 24,000 sqm, being located at the seaside, has the atmosphere of a fishing village and even has its own lighthouse.
The capital's Old Town was the inspiration behind the Warsaw complex. According to TOC marketing manager Marzena Janiszewska, the firm might ultimately have about six outlets in Poland.
