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"It's about continuity"

It’s been a few months since you resigned. How are you doing?

Very well. I’m still very busy. For one thing, my activities for Warimpex didn’t just come to an abrupt end on 31 December 2017. There are still a few projects that have to be handed over in the interests of a smooth internal workflow. In the future, I’d like to devote most of my time to managing my private holdings.

You’re still a shareholder in the company. How do you want to carry out this role?

Not actively. I plan to attend the annual general meeting. Naturally, my friendships and family ties at Warimpex are still intact. There will be plenty of small talk about the company, but I won’t meddle in any decisions.

You’ve been active in the art world for a long time. Will these activities play an even bigger role for you in the future?

Art plays a role in my life, but not a central one. My activities will basically remain the same as they have been in the past. I see myself as a sponsor – not by buying art, but by creating an audience for artists with exhibitions, catalogues, and networks. I’m involved in the Kunstraum Nestroyhof gallery, where shows are held on an ongoing basis, I present the works of a selected artist once a year in the Semperdepot building as part of the “wir zeigen” project, and I do photo exhibitions at the Salmgasse event space

How do you pick the artists you want to promote?

By keeping my eyes open. Through contacts. By enquiring and making an appropriate selection. 

One current example is Friedrich Erhart, who for years was the successful manager of one of the biggest Austrian funds at Pioneer Investments. Two years ago, he resigned from that position and became a photographer. He said that he wants to learn for 25 years, work for 25 years, and do something else for 25 years. I’m impressed by that philosophy and the quality of his artistic work, and this year we’re doing a bigger exhibition with him at Salmgasse starting at the end of May [author’s note: the exhibition opens on 29 May 2018].

Let’s get back to Warimpex, to the company’s beginnings. You ran the company with Franz Jurkowitsch for over 40 years…

I worked at Warimpex for 46 years. Starting on 1 February 1971. My father founded the company as “Waren Import und Export” [author’s note: German for “Goods Importing and Exporting”] – hence the name Warimpex – and I’ve never worked for any other company. So I really don’t have any kind of outside perspective when it comes to the company.

Did you ever want to try work somewhere else?

No, I was very satisfied. I like the long-term nature of what we do. Warimpex is, in a certain respect, a family business. When I look at American companies, the CEO comes in for one or two years, wants to do everything in a new way, and is gone again after a short while. Short-term success is the focus there. But for us, it’s about long-term success, about continuity. Not about making headlines and then changing everything again a year later.

How many projects have you developed, in your estimation?

I would say about 50.

Which one comes to mind first?

The InterContinental Warsaw, the Kempinski in Vienna, the Le Palais in Prague, and of course the andel’s hotel in Łódź. But every project had a unique aspect somewhere and we worked very hard on every project. 

Because the decision-making channels were always very short at the company and decisions were made without a lot of red tape and without rigid structures, we were able to make lots of decisions in a very direct way. This flexibility in the day-to-day decisions is a bit of a contrast to the long-term nature of the company’s overall business approach I mentioned before. 

And you feel that this made it possible to realise such outstanding projects?

Yes. 

Take the InterContinental Warsaw, for example. There was a representative of InterContinental from America who was responsible for quality control for the building. The specifications called for the bedside lamp to be mounted, let’s say 15 centimetres from the edge of the bed. But then we wanted to make twin rooms instead of just double rooms – i.e. with two separate beds to accommodate two people who aren’t necessarily that close. This meant that the position of the bedside lamp was no longer right, because now it had to be 15 centimetres away from the new position, of course. It took a month for the fellow from InterContinental to get the approval from his bosses in America. 

That’s the difference between bureaucratic and streamlined decision-making processes. 

Over the years, you experienced some political and economic upheavals – for instance the fall of communism in 1989 or the financial crisis of 2007/08 and the subsequent economic crisis, which we are still feeling to some extent today. Was there ever a point in time where you thought, “Okay, now things are really going to be difficult for our business”?

In a way, things were simple in the time before the fall of communism in 1989. You have to keep in mind that the entire economy was organised around state-owned enterprises and monopolistic structures. For example, we supplied pumps to Hungary in the very early days. There was a clerk there who was responsible for the purchasing of pumps. She knew nothing at all about pumps, but companies that needed pumps sent her the specifications, an international call for tenders was issued, and we delivered. Through this process, we developed a good personal relationship with this lady. She was then reassigned and had to purchase insulating gas. She said, “I don’t know anything about insulating gas, I don’t know anything about pumps, but I know you. Can you help me?” We could, and we supplied the insulating gas. And we steadily expanded our offerings in this way – all the way up to hotels. Because eventually the people who had previously been in charge of procuring swimming pool pumps and swimming pool windows were responsible for the procurement of hotels. And so we said, let’s supply the hotels. This led to the construction of the Novotel and the Penta Hotel in Budapest all the way back in 1982.

All that came to a sudden halt with the political change in 1989. But we had made a name for ourselves and we had knowledge of the market and contacts – and the same remains true to this day. We were the sixth or seventh company to establish joint ventures in Hungary, the second in Poland, and the third or fourth in the Czech Republic. It was a time of great opportunities, and we were certainly able to take advantage of them!

By contrast, the international financial crisis of 2007/08 was difficult. Up until then, the banks had always been very cooperative and at that point they started being very restrictive with regard to Central and Eastern European countries – although the structural problems actually ended up hitting the Southern European countries the hardest. This also brought the transaction market to a virtual standstill. During that period, it was a very good thing that our entire business model is based on a long-term and flexible approach, and we showed tremendous patience. The partial portfolio sale of eight hotels in 2017 finally allowed us to accomplish what had been impossible on the transaction side for nearly ten years: selling the projects we had developed with an appropriate level of added value.

Which brings us to the question of the right timing. How did you know that now was the right time to leave the company after 46 years?

There were several reasons: Age is the obvious one – there’s no need to sugarcoat it and there’s a reason that the retirement age is around 65. That number didn’t just suddenly occur to someone overnight: It’s the age when our productivity starts to decline.

Secondly, Daniel showed me that he was willing and able to take over. In that case, it doesn’t work for two people to be there – one person has to be able to make the decisions. 

And finally, the company is doing very well now. So now was the right time to say, “I’ve got other things to do, too.” 

Is there any advice you want to give Daniel Folian as CFO?

Part of my job as CFO was always to identify which projects and visions we could implement and where the limits were. So, my advice would be to reach for the sky every now and then, but to always keep both feet planted firmly on the ground.

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