Resilient retail

Amid a complex retail environment, new shopping center projects and expansions to existing projects hope to achieve success through differentiation - offering something the competitors don't in terms of entertainment facilities and choice of shops while attracting new brands to the local market in the process.

Galerie Harfa, which will open in Prague 9 near the O2 Arena in early November, will offer 49,000 square meters of shopping and entertainment space, including a "Dinopark" children's playground, an ice rink, a fitness center and a large food court. Tamir Winterstein, general manager of project developer Lighthouse Group, says the unique entertainment facilities are part of Galerie Harfa's competitive advantage.  

"Differentiation was for us a key precondition to secure the future success of the shopping center," said Winterstein. "Good location and accessibility and a strong catchment area and tenant mix represent essential fundamentals of each project, but they are not enough."

Outside the capital, the second phase of shopping center Forum Liberec opened in late September, nearly doubling the center's size to 46,000 square meters. After a total investment of 1.7 billion Kč, the center will offer customers dozens of shops, restaurants, cafés, extended parking and a five-screen multiplex cinema - nothing terribly out of the ordinary, but the advantage of Forum Liberec is its location.

"Forum Liberec has an excellent location in the regional capital. Due to the combination of its tenant mix with strong anchors, including some mid- to upmarket brands, along with its location and size, it can be perceived as a prime shopping center for the region and is comparable to some of Prague's shopping centers," said Ondřej Vlk, head of research at Jones Lang LaSalle.

Lucie Husníková, spokeswoman for Forum Liberec developer MULTI Development, agrees that the center's location, as a function of how many potential customers it can serve, is one of its main advantages.

"Our primary catchment area is Liberec, of course, but we focus on the whole region, which means approximately 350,000 people," said Husníková, adding, "We think we can also attract customers living in area of Mladá Boleslav, Česká Lípa and cities in the foothills of the Krkonoše Mountains. We also believe we can attract customers living on the Polish and German borders."

Husníková says that in addition to a fortunate location, the tenant mix at Forum Liberec will keep the foot traffic high - an obvious incentive to tenants. "The center also offers services on the perimeter like Česká spořitelna bank, newsstands and a travel agency, which enliven the surrounding streets and thus increase the attractiveness of the space," she said.

The 9,500-square-meter roof terrace park atop Galerie Harfa, where the Dinopark, ice rink and other entertainment facilities are located, also promises to attract the family demographic, customers who will likely stay to shop or eat at the center, as well.

Both Forum Liberec and Galerie Harfa also have office components to their projects, which when occupied, will be an additional source of foot traffic.

Despite continued economic uncertainty, among the 180 shops and cafés at the already nearly fully occupied Galerie Harfa shopping center are a handful of retailers making their Czech debut.

"UK-based Pure Fitness will open their first center in the Czech Republic, and the Spanish Cacao Sampaka and the Italian Filichori Zecchini will open their first café in the Czech Republic," Winterstein said. "Ulla Popken, KappAhl, Norská móda and LegoWear are opening their first shops in Prague, and some retailers will also introduce new concepts of their shops in Galerie Harfa."

Similarly, the second phase of Forum Liberec will bring a few household names like H&M, Oodji and KappAhl to Liberec for the first time.

Vlk says the increased interest of brands in the Czech market is in reaction to the signs of recovery the market is showing. 

"At the same time, the crisis created new opportunities on the market as some brands downsized their operations or withdrew from the market," Vlk said. "Retailers who are not currently on the market are surely aware that the local market is very big but also currently features a very limited number of brands. That is an opportunity for being new and unique on the market and different from the rest."

Emily Thompson can be reached at
ethompson@praguepost.com