Warsaw's retail pilgrimage
On Wednesday, October 20, 120,000 people made their way to the new Arkadia shopping mall in the Żoliborz district of Warsaw, which at 110,000 square meters claims to be the biggest of its kind in the Central and Eastern European region.
Local residents felt the impact of their imposing new neighbor keenly enough and some complained about the unprecedented litter the crowd had brought with it. Never before had such a throng converged on the area, said one visitor to the daily newspaper Gazeta Wyborcza, and went on to compare the mass of shoppers to a "pilgrimage".
Arkadia was developed by the ERE/BEG Group, whose various branches were also responsible for its architecture, general construction and leasing. The group consists of three major shareholders: J.P Morgan/Peabody Group with a 35 percent stake, the Simon Property Group with another 35 percent and BEG Management with 30 percent. Groupe BEG is a French-based firm which was formed in 1966 to build the first ever hypermarkets and has to date been involved in 350 retail projects in France, Italy, Poland, Portugal, Spain and Turkey, amounting to a total of 4 million square meters. In 1998 it teamed up with the American Simon Property Group and Peabody Funds to launch European Retail Enterprises B.V (ERE) to develop shopping and entertainment centers around Europe. The former company is "the largest shopping center developer in the USA," according to Hans Mautner, chairman and CEO of its international arm Simon Global Limited, and even "at this moment, the biggest in the world," he added at the press conference to inaugurate Arkadia. This status was secured, he said, when Simon acquired 'Chelsea' the USA's most prominent developer of outlet centers this month. The company now owns over 300 shopping centers in North America which together add up to 20 million square meters. Its international policy, however, is to team up with the locals: "Our goal is not to do it alone but to do it [develop] through partners who are already active in the countries we're interested in or are good at what they do," said Mautner. Poland has been home to 70 percent of ERE's European portfolio and the group has previously developed centers in Warsaw, (Centrum Wileńska, in the Praga district of the city, with 25,300 square meters), Szczecin, Katowice, Wrocław, Kraków and a smaller project in Gliwice. These investments total some 302 million, 158 million of which was spent on Arkadia. Finance on the new project was provided by Aareal Bank to the tune of 140 million.
Arkadia's anchor tenants are the hypermarket Carrefour with 18,200 square meters, and the household goods retailer Leroy Martin with 10,000 square meters. The center will also be home to the EMPiK Media&Fashion Group (EMPiK, Zara, Smyk and Espirit), Peek&Cloppenburg, H&M, C&A, Marks&Spencer and Royal Collection, to name just a few of the retailers who have leased 98 percent of the space. Entertainment will be provided by a fifteen screen Cinema City theatre, which will be the largest multiplex in Warsaw and will open on November 17. According to Mooky Greidinger, CEO of Cinema City International: "Arkadia is the flagship cinema for us and marks stage B in our development plans, which will involve opening a further nine multiplexes around Poland before the end of 2005, including in Łódż, Poznań and Wrocław."
The owners of Arkadia have made much of the building's design, which is divided into four passages, supposedly resembling the street grids of early modern cities and symbolizing the physical and metaphysical aspects of life. Each retail type has been placed in its own 'world', as Arkadia itself puts it, and shoppers hunting for clothes will descend on 'fashion world', the peckish will go to the 'world of flavors' food court on the first floor and the active will head to 'sport and recreational world'. With only two levels Arkadia does allow for a less vertical and a freer, perhaps less exhausting exploration of its space but it is in all essentials a fairly conventional variation on the shopping center theme. With a hypermarket-anchor and its entertainment offer represented by a multiplex, it avoids the riskier innovations that have taken place on the other side of Warsaw at Blue City.
Opened in April on Aleje Jerozolimskie, Blue City has rejected point blank that a shopping and entertainment mall should contain a hypermarket and multiplex. "We believe that entertainment in Warsaw does not mean Cinema City with 15 or 16 screens," said investor Amnon Shiboleth, at the press conference to launch Blue City earlier in the year. The center has also eschewed the hypermarket concept, in favor of a smaller Piotr i Paweł supermarket. Entertainment, rather than being sourced out to an annexe at the side of the main complex, has been built into the very fabric of the center: Magic City on the top floor is amusement arcade, children's play area and adult nightclub forged into one territory for fun.
Hans Mautner, however, doesn't believe that such innovations are viable in the long term. In an interview with Lokale he related the experience of the US, (which, he was at pains to insist, is not always transferable to other parts of the world) where there had been "a period of psychic seduction that there had to be other ways to entertainment. There were entertainment centers which ran the gamut from game machines to a mystery black box where you could experience virtual reality. This is all very expensive and people are very fickle. There's been a kind of transition in the US and now the current feeling is that cinema is the best entertainment driver."
The "chemistry" of the multiplex with restaurants and a colourful range of tenants, is also something Mautner highlighted as integral to the 'feel-good' aura of a mall. The cinema offer, he maintained, will always make money and is simply the most economical way of keeping people happy. "I've seen some examples of bowling and other things in this country and they're pretty sorry," he said. "If you were to go to Sony or Dreamworks and say design some wonderful experiential entertainment module for me, it would be both staggeringly expensive and wouldn't be big enough to generate enough throughput: you only get 15-20 people on a virtual reality game at any one time, for instance. People also get bored, so it might work wonderfully for six months but then people will start to say, "What's new?""
Of the competition from Blue City Mautner maintained that Arkadia would soon show the other who's best: "I'd be willing to compare the footfall in January between Blue City and Arkadia and would be very surprised if we don't have more."
So far, customers have been voting with their feet in their thousands all the way to Żoliborz but then they did likewise back in April at Blue City. Then, those feet trampled fellow punters in the dash for cut-price DVD players on the opening day. There was no such repetition at Arkadia, which had invited hundreds of Varsovians for a pre-launch wander around the mall on the eve of the official opening, perhaps to offset the possibility of a greed-driven stampede. In the event, the multitude arrived calmly, if equally as determined to pick up a bargain. The latest retail pilgrimage had begun in Poland.
Local residents felt the impact of their imposing new neighbor keenly enough and some complained about the unprecedented litter the crowd had brought with it. Never before had such a throng converged on the area, said one visitor to the daily newspaper Gazeta Wyborcza, and went on to compare the mass of shoppers to a "pilgrimage".
Arkadia was developed by the ERE/BEG Group, whose various branches were also responsible for its architecture, general construction and leasing. The group consists of three major shareholders: J.P Morgan/Peabody Group with a 35 percent stake, the Simon Property Group with another 35 percent and BEG Management with 30 percent. Groupe BEG is a French-based firm which was formed in 1966 to build the first ever hypermarkets and has to date been involved in 350 retail projects in France, Italy, Poland, Portugal, Spain and Turkey, amounting to a total of 4 million square meters. In 1998 it teamed up with the American Simon Property Group and Peabody Funds to launch European Retail Enterprises B.V (ERE) to develop shopping and entertainment centers around Europe. The former company is "the largest shopping center developer in the USA," according to Hans Mautner, chairman and CEO of its international arm Simon Global Limited, and even "at this moment, the biggest in the world," he added at the press conference to inaugurate Arkadia. This status was secured, he said, when Simon acquired 'Chelsea' the USA's most prominent developer of outlet centers this month. The company now owns over 300 shopping centers in North America which together add up to 20 million square meters. Its international policy, however, is to team up with the locals: "Our goal is not to do it alone but to do it [develop] through partners who are already active in the countries we're interested in or are good at what they do," said Mautner. Poland has been home to 70 percent of ERE's European portfolio and the group has previously developed centers in Warsaw, (Centrum Wileńska, in the Praga district of the city, with 25,300 square meters), Szczecin, Katowice, Wrocław, Kraków and a smaller project in Gliwice. These investments total some 302 million, 158 million of which was spent on Arkadia. Finance on the new project was provided by Aareal Bank to the tune of 140 million.
Arkadia's anchor tenants are the hypermarket Carrefour with 18,200 square meters, and the household goods retailer Leroy Martin with 10,000 square meters. The center will also be home to the EMPiK Media&Fashion Group (EMPiK, Zara, Smyk and Espirit), Peek&Cloppenburg, H&M, C&A, Marks&Spencer and Royal Collection, to name just a few of the retailers who have leased 98 percent of the space. Entertainment will be provided by a fifteen screen Cinema City theatre, which will be the largest multiplex in Warsaw and will open on November 17. According to Mooky Greidinger, CEO of Cinema City International: "Arkadia is the flagship cinema for us and marks stage B in our development plans, which will involve opening a further nine multiplexes around Poland before the end of 2005, including in Łódż, Poznań and Wrocław."
The owners of Arkadia have made much of the building's design, which is divided into four passages, supposedly resembling the street grids of early modern cities and symbolizing the physical and metaphysical aspects of life. Each retail type has been placed in its own 'world', as Arkadia itself puts it, and shoppers hunting for clothes will descend on 'fashion world', the peckish will go to the 'world of flavors' food court on the first floor and the active will head to 'sport and recreational world'. With only two levels Arkadia does allow for a less vertical and a freer, perhaps less exhausting exploration of its space but it is in all essentials a fairly conventional variation on the shopping center theme. With a hypermarket-anchor and its entertainment offer represented by a multiplex, it avoids the riskier innovations that have taken place on the other side of Warsaw at Blue City.
Opened in April on Aleje Jerozolimskie, Blue City has rejected point blank that a shopping and entertainment mall should contain a hypermarket and multiplex. "We believe that entertainment in Warsaw does not mean Cinema City with 15 or 16 screens," said investor Amnon Shiboleth, at the press conference to launch Blue City earlier in the year. The center has also eschewed the hypermarket concept, in favor of a smaller Piotr i Paweł supermarket. Entertainment, rather than being sourced out to an annexe at the side of the main complex, has been built into the very fabric of the center: Magic City on the top floor is amusement arcade, children's play area and adult nightclub forged into one territory for fun.
Hans Mautner, however, doesn't believe that such innovations are viable in the long term. In an interview with Lokale he related the experience of the US, (which, he was at pains to insist, is not always transferable to other parts of the world) where there had been "a period of psychic seduction that there had to be other ways to entertainment. There were entertainment centers which ran the gamut from game machines to a mystery black box where you could experience virtual reality. This is all very expensive and people are very fickle. There's been a kind of transition in the US and now the current feeling is that cinema is the best entertainment driver."
The "chemistry" of the multiplex with restaurants and a colourful range of tenants, is also something Mautner highlighted as integral to the 'feel-good' aura of a mall. The cinema offer, he maintained, will always make money and is simply the most economical way of keeping people happy. "I've seen some examples of bowling and other things in this country and they're pretty sorry," he said. "If you were to go to Sony or Dreamworks and say design some wonderful experiential entertainment module for me, it would be both staggeringly expensive and wouldn't be big enough to generate enough throughput: you only get 15-20 people on a virtual reality game at any one time, for instance. People also get bored, so it might work wonderfully for six months but then people will start to say, "What's new?""
Of the competition from Blue City Mautner maintained that Arkadia would soon show the other who's best: "I'd be willing to compare the footfall in January between Blue City and Arkadia and would be very surprised if we don't have more."
So far, customers have been voting with their feet in their thousands all the way to Żoliborz but then they did likewise back in April at Blue City. Then, those feet trampled fellow punters in the dash for cut-price DVD players on the opening day. There was no such repetition at Arkadia, which had invited hundreds of Varsovians for a pre-launch wander around the mall on the eve of the official opening, perhaps to offset the possibility of a greed-driven stampede. In the event, the multitude arrived calmly, if equally as determined to pick up a bargain. The latest retail pilgrimage had begun in Poland.
