Czechia is the only country in Central and Eastern Europe to boast a Prime High Street
Prague is the only city in the CEE (Central and Eastern Europe) region to boast a Prime High Street, a shopping street with only the most prestigious global brands. This location is Pařížská (Paris) Street, where currently 46 out of 48 available retail units are occupied. The interest of premium brands in this location has increased significantly since the Covid pandemic subsided. According to experts from Colliers, a leading provider of diversified professional services in the field of commercial real estate and investment management, it is only a matter of time before another similar zone is created in Prague and the city's reputation as a global player in luxury retail grows even more.
In the beginning there was Hermès.
After the fall of communism, a significant market opened up for Western brands in the East Bloc countries. The Czech Republic, thanks to its advantageous location and high attractiveness for tourists, became the first country where luxury brands decided to expand. The first brand to be represented in Prague was Versace in 1995. However, the first luxury boutique was opened in 1997 by Hermès in Pařížská Street, followed a year later by Louis Vuitton. Today, a total of 26 boutiques dedicated to fashion and accessories, including 7 jewellers, 6 luxury watch makers, 4 leather accessory producers and 2 luxury shoe designers can be visited in Prague's Pařížská Street. One store belongs to Nespresso, the only representative of the food and beverage category located in the street.
"After the arrival of Hermès, it took less than 10 years for the street to become a luxury shopping destination with a mix of direct and partner-run stores. Over the past decade, the street has only become more popular with the arrival of better brands and direct brand stores replacing multi-brand ones. A single multi-brand store remains in 17 Paris Street. It represents designer brands such as Tom Ford, McQueen, Loewe, Givenchy, Balmain, Chloe, Jacquemus and Off-White, all of which will soon likely show interest in acquiring their own branded stores. Fortunately for us and for the brands, Paris Street is also expanding. The redevelopment of the Fairmont Hotel includes several new retail spaces located along Pařížská Street," comments Marjan Gigov from Colliers.
Cartier, Fendi, Hermès and Dior: the most popular Czech brands.
According to available data, Cartier was the only brand to see an increase in turnover of around 2.4% in 2020. This was a time when borders were closed and retailers had to rely solely on local customers. Fendi came in second place, followed by Hermès and Dior. These figures suggest that these four brands are among the most popular with Czech customers. On the other hand, Gucci posted the biggest drop in turnover over the same period (approx. a 64% decline), followed by Louis Vuitton and Prada (both down by approx. 46%), which points to these brands’ dependence on tourists.
"After the pandemic ended in 2022, around 6 million tourists visited the Czech Republic: a 26% drop compared to the pre-Covid-19 period. Dior, for example, managed to exceed its 2019 turnover by 73% this year, while Hermès achieved a 41% increase in sales," adds Marjan Gigov, noting that this positive trend is what has led to growing interest from other brands in spaces on Prague's Prime High Street.
What other major cities in CEE will reach Prime Hight Street?
"At Colliers, we are working to make other CEE capitals attractive destinations for luxury brands. As can be seen in Prague's Paris Street, the creation of a Prime High Street is a long journey. However, given such a location’s ability to become a symbol of prestige that attracts attention and admiration from all over the world, the effort is definitely worthwhile," explains Marjan Gigov, adding that other adepts include Budapest and Warsaw. Budapest is relatively close to the creation of a Prime High Street. It is a beautiful city, the number of tourists is increasing every year, and Andrassy Boulevard is already home to several luxury brands such as Louis Vuitton, Jimmy Choo, Moncler and Gucci. Plus, there is still room for more of top brands. However, the weak economy and the lower purchasing power of the local population have so far prevented the creation of a desirable environment for luxury brands. Warsaw is one step closer to having a Prime High Street. Many luxury brands are already represented there, albeit only through partner multi-brand stores. But it's a relatively quick journey from those arrangements to privately-owned branded boutiques. The situation in the Polish capital is helped by the local population’s increasing purchasing power and the growing number of tourists.
