Glitzkrieg

High fashion looms large

THE elegant silhouette of Aston Martin's DB9 sports coupé draws admiring gazes anywhere. But it stands out even more than usual amid the drab communist-era apartment blocks of Warsaw's Praga district, where the British carmaker's first Polish dealership opened this spring. The city will soon also get Bentley and Ferrari showrooms, and the sellers of expensive cars will be joined by purveyors of pricey fashion brands: Louis Vuitton and Christian Dior boutiques are in the offing. The global market for luxury goods shrank by as much as 13% in 2009, say some estimates, but high-end goods are flourishing in Poland.

Last year Poland was the only member of the European Union to avoid a recession and the economy still looks perky. Investors also find it welcoming. A recent French study ranked Warsaw the third-friendliest city in Europe for entrepreneurs. As Poles get richer, they are developing a taste for luxury.

KPMG, a consultancy, calculates that some 2.5m Poles now earn at least 3,700 zlotys ($1,100) a month, and they are ready to devote 13% of their disposable income to luxury items. This tots up to 27 billion zlotys. And the ranks of those with financial assets of $1m or more are growing particularly fast: swelling by 11% in 2007-09, to over 86,000, according to MDRC, a research firm. The keenest shoppers are 30-somethings who came of age after the fall of communism and are happy to flaunt their wealth.

Retailers are gradually responding to the demand. KPMG estimates that over half of the world's premium brands now have an official distributor in the country, with luxury cars especially well represented. A persistent carp is that cityscapes razed during the second world war, then blighted by communist urban planners, offer few locations swanky enough for upmarket outlets. Another challenge is finding skilled staff.

The more imaginative retailers are working around these problems. One perfumery, GaliLu, sends its staff to London for training. A shirtmaker, Da Vinci, shifts most of its stock through an online shop and sends tailors to customers' homes and workplaces. The result, predicts Andrzej Marczak, of KPMG in Warsaw, will be that Poles raise their spending on luxury by a half within the next three years. What next, mega-yachts on the Vistula?