Historic Warsaw store, seeking rebirth, hit by pandemic

WARSAW, Poland (AP) — The Jablkowski Brothers Department Store was once a Warsaw landmark that revolutionized shopping and brought goods to a modernizing society in the early 20th century. But unlike Harrods in London and other Western counterparts, the business was forced into bankruptcy and seized by Poland's communist regime that took power after World War II.

When communism fell in 1989, the Jablkowski family heirs began a long legal struggle to regain their properties. They were preparing to launch when the coronavirus pandemic hit, dealing one more blow to a family business that has seen a history of hardship mirroring Poland's adversities.

“The pandemic hit us in a moment when we were almost ready to go,” Monika Jablkowska, one of the heirs, told The Associated Press.

The pandemic has created new uncertainty because it has accelerated a trend toward online shopping, leaving questions about what kind of in-store retail experiences consumers will embrace in the coming years.

The family business started when Aniela Jablkowska began selling stationery from a chest of drawers in 1884. It expanded into the largest and most important department store across Eastern Europe. In 1914 — just as World War I began — the family opened its main building, a six-story gem of modernist architecture with soaring ceilings and stained glass windows that is now a historic landmark.

Today a European Union member, Poland was at the time carved up by foreign powers, with Warsaw part of the Russian empire. In its early years, the company sold its merchandise in rubles, with a catalogue and delivery service that sent goods as far away as the Russia's far-east city of Vladivostok.

The business pulled through two world wars, hyperinflation and even the flu pandemic of 1918-20. During World War II, when German occupying forces destroyed most of Warsaw, the building was among the few to survive.

What dealt the final blow to the business, though, was Poland's postwar communist regime, which imposed a huge tax forcing its bankruptcy, and then seized the store in 1950.

Jan Jablkowski, one of the heirs, says the family feels a “strong sense of obligation to continue” as an element of the city's heritage, and has turned down even attractive purchase offers.

“We believe that such firms, present for many generations — just like the material substance of the city, its squares, its monuments, the street names — are all elements of the identity of this city," said Jablkowski, a retired engineer who was formerly the head of Poland's Institute for Automation and Measurements.

According to Cezary Lazarewicz, author of a book about the business, “Six Stories of Luxury,” the store offered a number of innovations to city shoppers -- not only all the clothes, toys and other goods for sale, but also neon advertisements, a terrace cafe, fashion shows and live piano music to stimulate shoppers.

He said the business was “revolutionary” in its introduction of catalogs, making it the Amazon of its age, and in its introduction of ready-to-wear clothing to a huge market.

“It wasn’t just a department store,” but a place that offered up a sense of magic, Lazarewicz said. “It was an exceptional place on the Warsaw map.”

After the fall of communism, the family began a legal battle to get back the building, but it took more than 20 years because they first had to reconstitute the prewar business. Even after the property was legally returned in 2004, a bookshop refused to vacate the premises, triggering more court cases until the store was finally regained in 2013.

The heirs' initial plan was to revive the department store, but with department stores struggling to survive across the world — a trend accelerated by the pandemic — they realized that business model was no longer sustainable.

So they developed a new business plan to open it as a retail space of 4,500 square meters (48,500 square feet) with concept shops, restaurants, and spaces for cultural events. Then came the pandemic.

“The big question is how the business will look post-pandemic and whether the model will still be relevant afterwards,” Monika Jablkowska said.

Even before the pandemic, Poland has seen a huge retail upheaval, with international companies like Marks & Spencer and The Gap coming in, only to later leave the dynamic but demanding market where foreign brands compete with Polish clothing makers like Reserved. Online shopping has also taken hold, with Amazon recently entering Poland.

The fact that people buy fewer clothes now and have embraced more casual clothing creates uncertainties about what stores might want to open up in their building, Jablkowska said.

Two business professors who have studied the Jablkowski company, Tomasz Olejniczak and Anna Pikos at the Kozminski University in Warsaw, argue it's in a weaker position financially than counterparts elsewhere because of the way Polish industry and businesses were stripped of their capital by communist authorities.

Other department stores from Tokyo to Paris to London "are struggling, but over their continuous history they have amassed enormous wealth and resources which they can now use to reinvent or redefine themselves in the age of luxury and e-commerce,” Olejniczak and Pikos said in joint email.

“They have all the freedom they want to reinvent themselves, but they also have virtually no resources and very limited money," the two said about the Jablkowski project.

Jablkowski says the family is taking a cautious approach now to ensure its survival. During the pandemic, managers and employees took voluntary pay cuts and the company again is earning revenue by hosting fairs and exhibitions. No key decisions will be made until the shape of the post-pandemic world comes into better focus.

“We remember the history of the past 100 or so years, and we are very sensitive about the secure functioning of the business," Jablkowski said. “For this reason, we are being cautious.”