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Asian vendors face losses after fire

Uninsured tenants salvage goods after 20-hour blaze

By Curtis M. Wong
Staff Writer, The Prague Post
November 19th, 2008 issue

JAN PŘEROVSKÝ/THE PRAGUE POST
Workers assess the damage to their textile warehouse in the Vietnamese section of the Prague 4-Libuš marketplace after the Nov. 6 blaze.
JAN PŘEROVSKÝ/THE PRAGUE POST
Many vendors were uninsured, and the total cost of damaged goods is expected to exceed 100 million Kč.
JAN PŘEROVSKÝ/THE PRAGUE POST
James Wu had scarcely arrived in Munich after a grueling flight from his native China when he received a frantic telephone call from a colleague. The unfortunate news was enough to instantly jolt him alert: China Mart, the shop Wu has owned and operated for almost five years and a flagship retailer of the Little Hanoi Vietnamese Sapa marketplace in the Libuš section of Prague 4, had caught fire.
“It was a truly terrible feeling,” said Wu, who has resided in the Czech Republic since 1997. “We don’t have any insurance for our goods, and we could’ve lost everything.”
Luckily for Wu and his associates, China Mart was only singed by the Nov. 6 blaze, as a total of 350 Prague firefighters managed to tackle the fire — the marketplace’s second this year — before it engulfed the shop. Neighboring retailers, including a textile warehouse and a footwear outlet, were not so fortunate: Officials say the nearly 20-hour inferno left those stores, as well as their sizable inventory, in ruins.
“Everyone is very upset. … They lost all of their property,” said Wu, whose shop specializes in luxury home furnishings. “Right now, their main concern is whether or not they can salvage anything and if they’ll be able to work here again.”
While authorities have ruled out arson, the cause of the fire, which broke out shortly after midnight and was the city’s second-largest in 25 years after the Oct. 16 Industrial Palace inferno at the Prague 7 Výstaviště exhibition grounds, has yet to be determined. Many have speculated that the fire was accidental and possibly electrical in origin, and no serious injuries were reported. The full investigation is expected to be concluded by the end of the month.  
While the blaze has affected approximately one-fifth of the 250,000-square-meter market, the aftermath has divided the marketplace’s tenants, most of whom sold goods that were uninsured against such damages, and its owners, who did not appear particularly vexed about the incident.   
“The whole situation has been greatly exaggerated. … The fire has affected a relatively small area,” said Tran Quang Hung, the marketplace’s general director. “If it’s human error, there is no way we could’ve prevented it.” Hung estimates the demolition and re-development of the damaged area, much of which was used for storage, will cost several million crowns and would be covered by insurance.
While insuring goods against potential damages is standard practice for most Asian businesses, retailers say they weren’t sure how to go about the process in the Czech Republic, partly due to the language barrier. At present, 80 percent of the market’s tenants are Vietnamese, with Chinese comprising an estimated 10 percent.
 “Of course, having insurance is important for every retail company,” Wu said. “Everyone working here wanted to have their products insured, but they didn’t know how to do it. So they are all hoping for money from somewhere.”
Hung disagreed, noting he anticipated a quick recovery for the affected retailers. “Some of the vendors may have to start from scratch, but most of them have a larger company backing them. They might take a loss, but I don’t expect any bankruptcies as a result.”
According to Marcel Winter, chairman of the Czech-Vietnamese Society in Prague, the total cost of the damaged goods is expected to exceed 100 million Kč ($4.9 million). While acknowledging that many of the market’s retailers would undoubtedly take large losses in the wake of the blaze, Winter said he felt most vendors had the resources — and the drive — to persevere.
“These are tenacious and hard-working people,” he said. “They’ll keep a stiff upper lip and continue working. … They have to, because many of them have children who attend high schools and universities here. They can’t just pack up and leave.” He added that he was perplexed as to the cause of the fire, given that the market has undergone three safety inspections since an earlier blaze Sept. 7, which was also ruled to be accidental.   
Hung said he didn’t expect the fire to strongly affect business at Little Hanoi, known throughout Prague for its restaurants, exotic produce and low-priced clothing. While a re-evaluation of leasing agreements was necessary, he said, requiring future tenants to be insured was unlikely.
“We’ll probably have to adopt stricter measures and keep tighter control of our tenants to keep the situation from happening again,” Hung said. “If they have insurance, that’s fine. If they don’t, that’s their own problem.”
For his part, Wu’s shop has re-opened for business, and he and his associates have begun a massive cleanup effort, washing ash and soot from China Mart’s leather sofas, mahogany dining tables and ornate pottery. Due to the smoke and water damage, many of the items will have to be sold at a sizable discount, and Wu predicts his shop will inevitably take a loss of about 3 million Kč. He said he plans to secure insurance for his products in the future.
As he gestured toward a golden Buddha in one corner of his office, Wu said he was mostly grateful that his shop was spared and no employees were harmed.  
“Of course, my business has been affected, but not too much,” Wu said. “I guess I’m just very lucky.”
 — Naďa Černá and Nina Makelberge contributed to this report.

Curtis M. Wong can be reached at cwong@praguepost.com


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